Trump has rate cut litmus test for next Fed chair, wants Powell to quit; touts record high U.S. stocks as Q1 GDP down to -0.5%

U.S. President Donald Trump wants 1% interest rates, is making support for rate cuts a prerequisite for the next Federal Reserve chairman and hailed U.S. stock markets hitting record highs Friday.

Trump also continued to berate Federal Reserve Chairman Jerome Powell over his hesitancy to cut interest rates citing concerns about the president's tariffs driving up inflation or slowing the economy. Trump said he'd like to see Powell resign before his term ends next year.

All that comes as the U.S. Commerce Department revised first quarter economic growth number down to -0.5%.

The S&P 500 and Nasdaq both closed at record highs Friday. U.S. stocks have rebounded after dropping over investors' and Wall Street fears over Trump's tariffs' announced in April.

Concerns over Trump's tariffs and high federal debt levels that could be magnified by proposed tax cuts and continued spending levels, including a $1 trillion defense budget, have also rattled bond markets.

Trump has reduced and delayed many of those tariffs but said Friday the U.S. was cutting off trade talks with Canada over a spat over a Canadian digital services tax on American tech firms. Trump also stepped up his trade rhetoric toward the European Union Friday, calling them "nasty."

Still, investors have shown a continued appetite for buying and stock profits, buoyed by bullish enthusiasm for artificial intelligence propelling the technology sector.

Trump also continues to rail against Powell over the central bank's hesitancy to cut interest rates.

Powell wants to wait and see the impact of Trump's tariffs and foresees the potential for higher prices. The current prime U.S. lending rate is 4.5%.

"He's a stupid person," Trump said of Powell. "We have a guy that's just a stubborn mule and a stupid person."

Trump wants interest rates at 1%.

'I'm going to put somebody who wants to cut rates. There are a lot of them out there," Trump said.

Powell's term is up next year. The U.S. president appoints the central bank chairman.

Trump appointed Powell during his first term in the White House and former President Joe Biden reappointed Powell to another four year term.

Trump's criticisms of Powell, including name calling, his previous threats to fire the Fed chair and now his requirement that new chair be supportive of rate cuts has raised some questions about the political independence of the U.S. central bank.

Trump said Friday he would welcome Powell resigning.

The Fed chair has brushed off Trump's name calling and criticism and has said he will serve out his term.

Powell has said Trump's tariffs and the uncertainty around their levels, longevity and implementation creates economic unpredictability, including related to economic growth and inflation.

The U.S. Commerce Department revised first quarter U.S. economic growth numbers down to 0.5%.