US Treasury Secretary Steven Mnuchin: Trump may finalize the next Federal Reserve chairman candidate this month with interest rates still "significantly above neutral levels"

US Treasury Secretary Benson said that it is expected Trump will decide on the next Federal Reserve Chairman this month, and the decision may come before or after the Davos Forum. Benson said on Thursday after a speech at the Economic Club of Minnesota that Trump plans to attend the World Economic Forum in Switzerland from January 19 to 23, and the decision on the successor to the Federal Reserve Chairman could be made "before or after, that is, in January." He revealed that there are currently four candidates, including National Economic Council Director Hassett, former Fed Governor Warsh, current Fed Governor Waller, and BlackRock executive Rieder. Benson said Rieder is the only candidate still awaiting an interview and the only one without a background at the Federal Reserve, whether that is an advantage "depends on the President's judgment." Regarding monetary policy, Benson bluntly stated that interest rates are still too high. "We are still significantly above the neutral interest rate level, I believe monetary policy should not be restrictive." He added that most models show that the appropriate interest rate range should be between 2.5% and 3.25%. Federal Reserve officials lowered the benchmark interest rate to a target range of 3.5% to 3.75% last month. Current Chairman Powell did not explicitly indicate that there will be further rate cuts in early 2026. The Federal Reserve will hold its next interest rate meeting on January 27-28, and the probability of taking action at this meeting is low according to interest rate futures market. Recently, more and more Federal Reserve officials tend to maintain interest rates unchanged until more inflation and employment data are obtained. Earlier, Benson was quoted by the media as saying that the Federal Reserve "should not delay" further rate cuts. Media reports stated that this statement was included in his written remarks prepared for this event, but he did not make this statement directly in his speech. In his official speech, he only said, "The Federal Reserve must also fulfill its responsibility to promote investment growth." In his speech, Benson strongly endorsed the economic agenda of the Trump administration, saying that the relevant policies have "established a foundation for strong economic growth." He praised last year's tax cuts, trade agreements, and deregulatory policy direction, while criticizing the Biden administration's "weak trade policy, high tax burden, and burdensome regulations" for weakening economic vitality. Regarding housing policy, Benson recalled that the phenomenon of large financial institutions buying single-family homes can be traced back to the aftermath of the global financial crisis, when private equity firms "swept up" a large number of housing assets with abundant liquidity and enjoyed tax advantages through depreciation and expense deductions. In response to Trump's plan to restrict large institutions from buying single-family homes in the US, Benson emphasized that this policy would be "forward-thinking" and would not require institutions to sell existing properties. "We will not hold past actions against them. We will not mandate selling." Trump said on Wednesday that he will push to prohibit institutional investors from continuing to purchase single-family homes to alleviate housing affordability pressures. Benson pointed out that the market is often determined by "marginal buyers," and the goal of the policy is to "squeeze out these marginal buyers" while preserving "traditional individual landlords." As for specific thresholds, Benson said the government has not made a final decision yet, "Is it considered an institution to have a dozen houses, or twenty? What scale constitutes an aggregator? These questions are still under discussion."