Fed chair candidate Waller says he will 'absolutely' stress importance of Fed's independence to Trump

Key Points

• Christopher Waller told CNBC he will stress the Fed's independence when he is interviewed by President Donald Trump on Wednesday.
• Waller is a finalist to succeed Federal Reserve Chairman Jerome Powell when Powell's term ends in May.
• Trump's hostility toward Powell has some investors worried that the president is trying to undermine central bank independence.

Federal Reserve Governor Christopher Waller told CNBC on Wednesday that he will "absolutely" emphasize the importance of central bank independence to President Donald Trump.

Waller is one of five finalists to potentially succeed Jerome Powell when the Federal Reserve chairman's term ends in May. He is scheduled to have an interview with Trump on Wednesday.

"Absolutely," Waller said when asked by CNBC's Steve Liesman whether he would emphasize Fed independence during his interview with the president.

"I spent 20 years of my life working on central bank independence and why it was important," he said at the Yale CEO Summit. "I have a long paper trail on this."

Trump regularly weighs in on Fed decisions, accusing the central bank of moving too slowly to cut interest rates. The president has been a harsh critic of Powell and has mused publicly about firing him before his term is up.

This has raised fears among some investors that Trump will try to install a pliant ally as Fed chair after Powell leaves the central bank. But Waller said Trump already makes his views about Fed decisions clear on Truth Social, leaving no confusion about where the president stands on monetary policy.

The biweekly breakfast between the Fed chair and Treasury Secretary is the appropriate venue for communication between the White House and the central bank rather than face-to-face meetings with the president, Waller said.

Waller told CNBC that he views rates as still 50 to 100 basis points above a neutral rate that is not stimulative or restrictive.

"We still got some room that we could bring things down," Waller said.

National Economic Council Director Kevin Hassett has been viewed as the front-runner to succeed Powell, though some high-level people close to Trump have pushed back on his candidacy. Former Fed Governor Kevin Warsh is also on the short list.

"I think you have Kevin and Kevin. They're both — I think the two Kevins are great," Trump told The Wall Street Journal last week.