Trump: Interest rate cuts are the litmus test for the Fed Chair, and tariffs may be adjusted to lower the prices of certain goods.

Trump stated that supporting substantial interest rate cuts will be a key criterion for selecting the next Federal Reserve Chair, and suggested that adjusting tariff policies could help lower prices. However, polls show that about half of voters believe the cost of living has reached the worst level of their lives, highlighting a clear gap with Trump’s optimistic assessment. This article is sourced from Wallstreetcn and was compiled, translated, and written by Foresight News.

(Previous context: 2026 Fed Leadership Transition: The Powell Era Ends, US Interest Rates Could Be Slashed to the Bottom) (Background supplement: Trump delivers national security strategy speech, does not mention cryptocurrency or blockchain, only discusses “financial innovation”)

According to POLITICO, US President Trump said in a White House interview on Monday that he would make support for immediate, substantial rate cuts the “litmus test” for his choice of the next Federal Reserve Chair, and may use tariff policy adjustments to help lower the prices of certain goods.

In the interview, Trump insisted that the performance of the US economy is “A-plus-plus-plus-plus-plus,” and said “prices are coming down across the board.” However, a recent POLITICO poll shows that about half of voters and nearly 40% of 2024 Trump voters believe the cost of living has reached the worst level of their lives.

Rate cuts become a key consideration for Fed Chair candidates

Trump made it clear that support for significant rate cuts will be a decisive factor in his selection of a new Fed Chair. When asked if this would be his “litmus test” for nominating a Fed Chair, Trump gave a short and definite answer: “Yes.”

The decision on the Federal Reserve Chair is imminent, and Trump’s position indicates he wants to address voter dissatisfaction with high prices through more accommodative monetary policy.

According to a previous Wallstreetcn article, regarding the Fed Chair position, White House National Economic Council Director Kevin Hassett stated, “Trump has many good options. If I have to be the choice, I would be happy to help him.” In addition, Hassett said it would be “irresponsible” for the Fed to announce the exact path of interest rates for the next six months in advance, emphasizing that decisions must be based on economic data.

Tariff adjustments: A policy tool to tackle price pressures

When discussing strategies to lower the prices of goods, Trump said he may make additional tariff policy adjustments, as he had previously done. However, he maintained that overall price trends are moving in the right direction. “Prices are coming down across the board,” Trump said. “Everything is getting cheaper.” However, this statement contradicts official data. According to a previous Wallstreetcn article, the latest Consumer Price Index released by the US Department of Labor shows that prices rose 3% in the 12 months ending in September.

Trump is trying to ease price pressures through trade policy adjustments, but he did not specify which goods would see tariff changes or the extent of these adjustments. The use of such policy tools indicates the White House is seeking multiple ways to address voter dissatisfaction with high prices.

Unresolved healthcare subsidies: 2026 premiums face sharp increases

In the interview, Trump gave his own economic performance an overwhelmingly positive review: “A-plus-plus-plus-plus-plus.” He believes voters’ dissatisfaction with prices should be blamed on the Biden administration.

However, there is a clear gap between this optimistic assessment and voters’ actual experiences. According to a recent POLITICO poll, about half of voters and nearly 40% of 2024 Trump voters said that the cost of living has reached the worst level of their lives.

The report notes that for many Americans, the most immediate threat to the cost of living is the expiration of enhanced Obamacare marketplace subsidies. These subsidies, passed by Democrats during the Biden administration, will expire at the end of this year, with medical insurance premiums expected to surge in 2026. Even before the subsidies expire, medical charities have already seen a noticeable increase in requests for assistance.

However, when asked whether he would support a temporary extension of Obamacare subsidies to buy time for drafting a comprehensive plan, Trump was noncommittal. “I don’t know, I have to see the situation,” he said, before turning to criticize Democrats for being too generous to insurance companies in the Affordable Care Act.

According to reports, the White House’s intentions on healthcare policy remain uncertain. In late November, the White House originally planned to announce a proposal for a temporary extension of Obamacare subsidies but subsequently delayed the announcement. Over the years, Trump has repeatedly promised to roll out a comprehensive alternative to Obamacare but has never delivered. This remains the case in this interview.

“I want to provide people with better health insurance at a lower price,” Trump said. “People will get funding, and they will buy the health insurance they want.”

When reminded that Americans are currently buying holiday gifts and preparing family budgets for 2026, but are facing uncertainty over insurance premiums, Trump responded, “Don’t be so dramatic. Don’t be so dramatic.”

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