President Donald Trump on Tuesday laid out what he called a new “rule” for his next Federal Reserve chairman, arguing that interest rates should be lowered when markets are performing well and criticizing the central bank for raising rates on fears of inflation despite strong economic growth.
The president’s post on Truth Social comes after Tuesday’s report that the American economy grew at a faster pace than analysts had expected in the third quarter of the year, according to new data from the Commerce Department. The administration has celebrated the report as validation of President Trump’s economic agenda.
“THE TRUMP RULE: The Financial News today was great — GDP up 4.2% as opposed to the predicted 2.5% (and this, despite the downward pressure of the recent Democrat Shutdown!) — But in the Modern Market, when you have good news, the Market stays even, or goes down, because Wall Street’s ‘heads’ are wired differently than they used to be,” Trump wrote.
“In the old days, when there was good news, the Market went up. Nowadays, when there is good news, the Market goes down, because everybody thinks that Interest Rates will be immediately lifted to take care of ‘potential’ Inflation.”
The post went on to say that the next Federal Reserve chair should be encouraging the market, and that any candidates who disagreed with him would not get the job.
Why It Matters
Trump has been highly critical of Federal Reserve Chairman Jerome Powell, whom he appointed during his first term in the White House, for not lowering interest rates as fast as he would have liked. Powell has been cautious to make dramatic changes to the rate, as the economy shifted in the early days of Trump’s second term, in part due to uncertainty over the president’s tariff policy. The president has been keen to show his economic plans are working, after heavily criticizing his predecessor, President Joe Biden.
What To Know
Trump’s lengthy post said that it was stupidity which created inflation, not “strong markets, even phenomenal Markets”, adding: “I want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason whatsoever.”
The president said he wanted to have a market “the likes of which we haven’t had in many decades,” which goes up with good news, and down with the bad, and that inflation would “take care of itself.”
In its latest report on Tuesday, the U.S. Department of Commerce said the country’s GDP rose from 3.8 percent in April-June to 4.3 percent in the third quarter. Consumer spending was up, but confidence had slumped, according to the Conference Board.
Inflation also remained higher than the Fed would like, at 2.8 percent, up from 2.1 percent the previous quarter, potentially lessening the chance of an interest rate cut in January, something the president would like to see.
In his post, Trump said a country could never have a great economy if “‘eggheads’ are allowed to do everything within their power to destroy the upward slope.”
Next Fed Chair: Who Could Be Appointed Next?
Powell’s term ends in May 2026, with Trump already eyeing up potential replacements for the man he himself appointed in 2017.
Reporting suggests a few frontrunners as of December 2025, including Trump loyalist and conservative economist Kevin Hasset, Former Fed governor and now critic Kevin Warsh, and the current Fed governor Christopher Waller.
The president also considered the current Secretary of the Treasury, Scott Bessent, for the role.
What People Are Saying
President Donald Trump, on Truth Social Tuesday: “We are going to be encouraging the Good Market to get better, rather than make it impossible for it to do so. We are going to see numbers that are far more natural, and far better, than they have ever been before. We are going to, MAKE AMERICA GREAT AGAIN! The United States should be rewarded for SUCCESS, not brought down by it. Anybody that disagrees with me will never be the Fed Chairman!”
White House spokesman Kush Desai, via X: “Today’s blockbuster, expectation-smashing GDP report is the latest proof that President Trump’s America First trade and economic agenda continues to turn the page on the Biden economic disaster: American consumers are spending, and American exports are surging. President Trump built the greatest economy in the world in his first term, and he’s in the process of doing it all over again. Americans can count on benefiting from a historic economic boom in 2026.”
Samuel Fuller, Director at Financial Markets Online, commented: “The data has one big sting in the tail for the president and those calling for further interest rate cuts. The US Federal Reserve has cut rates three times in a row in recent months, but the combination of stubborn inflation and resilient growth will likely take any further cuts off the table for the start of 2026, and this is weighing on US equities as we head into the holidays.”
What Happens Next
Despite optimism in Tuesday’s report, analysts are warning of a rocky start to 2026, with the risk of widespread job losses and the potential for interest rates to rise rather than fall.