P
resident Trump has been at odds with Federal Reserve Chairman Jerome Powell since 2017, when he nominated him for the position. However, Trump's interest in lower interest rates quickly turned into frustration as Powell maintained a steady course. As a billionaire real estate investor, Trump stands to benefit from lower interest rates, which would allow him to charge higher rents on his properties.

    Trump's business empire is largely inflation-proof, and he has consistently pushed for lower interest rates despite the potential risks of boosting inflation. In 2018, Trump asked Secretary of Commerce Wilbur Ross to speak with Powell about reversing a policy change, and in 2019, he tweeted that the Fed should cut rates by at least 100 basis points.

    The economy performed well until the pandemic, but creeping inflation led to higher interest rates as Trump left office. In 2021, Trump took out a variable-rate loan against an office complex in San Francisco, which proved to be a risky move when inflation persisted and the Fed hiked rates. His partner, Vornado Realty Trust, chose to lock in their rate at 2.26% for three years, but Trump gambled by letting his portion float freely.

    Trump made similar mistakes with another building in New York City, refinancing it with a variable-rate loan that left him vulnerable to rising interest rates. In both cases, he underestimated inflation and the high interest rates that come with it. His interest expenses at these properties more than tripled, resulting in $645 million of variable-rate debt.

    Trump's comments about Powell are likely another pressure tactic, but they may also indicate a desire to replace him with someone who will push down rates. When Powell's term expires in 2026 and again in 2028, Trump will have the opportunity to appoint a new Fed chair who aligns with his interests.