Trump Says Mnuchin Does Not Want to Be Nominated as Fed Chairman, Reiterates Job Data "Manipulated"

It was learned by Zhongtong Finance APP that on Tuesday, US President Trump said that Treasury Secretary Mnuchin told him that he did not want to be nominated to succeed Powell as the next Fed chairman. Trump stated in an interview: "I asked him last night if this is the position you want? Mnuchin's response was, 'No, I want to stay in my current position'." "He's doing a great job, he wants to continue doing what he's doing now, so I've ruled him out. He doesn't want this position. He likes being Treasury Secretary. He's doing really well."

Trump said that he is considering four candidates, including former Fed governor Kevin Warsh and National Economic Council director Kip Haglund, but he also warned that he does not intend to make a decision anytime soon. Trump added: "I think both 'Kevins' are great, and so are others."

It's worth noting that the term of Fed Governor Lael Brainard, who is set to end on January 31, 2026, unexpectedly announced her early resignation last Friday. The focus has turned to who will fill the vacancy in the Federal Reserve Board and how it may affect the selection of the next chairman.

Trump continues to pressure the Fed, urging it to lower interest rates and criticizing Powell on social media. Trump has repeatedly accused the Fed and Powell of being too slow to act on inflation and has said that the current monetary policy is too tight, causing the federal government's debt service costs to be too high and stifling economic growth.

Although Powell did not release a clear signal for a rate cut at last week's Fed meeting, market expectations for a rate cut have quickly warmed up since the publication of the US July nonfarm payroll data on Friday. The data showed that the US added only 73,000 jobs in July, far short of expectations, and both June and May's job additions were significantly revised down.

This latest job data has released a signal that the US economy is weak. As a result, interest rate futures markets have already priced in about 64bp of rate cuts for the remainder of the year - i.e., the rate cut expectations are converging towards an annualized 75bps by year-end, with a 90% probability of a September rate cut.

Additionally, after the publication of the US July nonfarm payroll data on Friday, Trump announced that he had fired Erika McTavish, the head of the US Labor Statistics Bureau, and accused her of "manipulating job data for political purposes." Trump's decision shocked Wall Street and raised concerns about whether it would affect the integrity of labor statistics data, which is crucial to global investors.

Although the host conducting the interview pointed out that former government officials said that the head of the US Labor Statistics Bureau does not participate in detailed data and that data revisions are part of standard process, Trump still reiterated the claim that job data was "manipulated." Trump claimed: "This is a completely political operation. It's being manipulated, smart people know it, reasonable people understand it."

Haglund defended Trump's decision to fire McTavish, saying that the process of revising job data needs clearer explanations and that the US Labor Statistics Bureau should "take a new perspective" and make its labor force data collection process more transparent and modernized. Trump stated that the process is "too old-fashioned and very politicized."