U.S. President Donald Trump joked to Kevin Warsh, a candidate for chair of the Federal Reserve (Fed), that he would "file a lawsuit" if rates were not cut.
According to the Wall Street Journal (WSJ) on the 31st of last month (local time), on the 25th in Washington, D.C., President Trump said in a closed-door annual dinner speech at the social gathering Alfalfa Club that Warsh "looked like just the right person for the role of Fed chair," and made the remark.
The Alfalfa Club's annual dinner speech is an event that gathers heavyweights from U.S. politics and business, where it is customary to tease attendees and make jokes. That day, President Trump also referred to former Sen. Mitt Romney, who represented traditional conservatism in the Republican Party, as a "leftist."
For that reason, Trump's remarks aimed at Warsh are being taken as jokes in the literal sense. Later, when asked by reporters about the intent of the comments, Trump explained that "it was a joke."
Trump said he did not ask Warsh for any promise regarding a rate cut, adding, "I could have if I had wanted to, but I didn't."
Some point out that because Trump publicly pressured current Fed Chair Jerome Powell to cut rates, his remark about suing Warsh also carried genuine intent. Trump's position is that the benchmark rate should be lowered to 1% or less.