"Not Lowering Rates? I'll Sue You"... Trump's Chilling Joke Leaves Fed Sweating

It has been reported that President Donald Trump of the United States joked that he would file a lawsuit if Kevin Warsh, the nominee for Chair of the Federal Reserve (Fed), did not lower interest rates.

According to the Wall Street Journal (WSJ) on January 31 (local time), President Trump made these remarks during a closed annual dinner speech at the Alfalfa Club, a social gathering held in Washington, D.C. on January 25. Explaining his decision to nominate Warsh as the next Fed Chair, Trump said, "I think I've cast the perfect person for the role of Fed Chair."

Donald Trump, President of the United States. Photo by UPI and Yonhap News Agency

However, President Trump later told reporters who asked about the intent behind his comments that it was a joke. He added that he did not ask Warsh to make any promises regarding interest rate cuts in exchange for the Fed Chair position, saying, "I could have if I wanted to, but I did not."

The Alfalfa Club, which brings together major figures from American politics and business, is known for its tradition of making playful jabs or self-deprecating jokes during its annual dinner speeches. In fact, during his speech, President Trump referred to Mitt Romney, the Republican Party's prominent traditional conservative, as a "leftist," and commented on Chief Justice John Roberts of the Supreme Court by saying, "I'm in a position where I just have to please him."

Local media outlets are also not taking President Trump's remarks at face value. However, given that President Trump has openly expressed dissatisfaction with Jerome Powell, the current Fed Chair, some point out that his comments about suing Warsh should not be taken too lightly. Powell's term ends in May.

Previously, the Fed cut interest rates three times last year, but at this year's first regular meeting of the Federal Open Market Committee (FOMC), it kept the benchmark rate unchanged in the range of 3.5 to 3.75 percent. In response, President Trump had harshly criticized Powell, saying, "Chair Powell is harming the nation's security." President Trump maintains that the benchmark interest rate should be lowered to below 1 percent.

Meanwhile, it was also reported that President Trump, during his Alfalfa Club speech, suggested the possibility of bombing Iran again. He has warned that military action could be taken if Iran does not stop its crackdown on protesters and refuses to engage in nuclear negotiations.