Trump Presses Fed Against Rate Hike as Warsh Faces First Policy Meeting
President Donald Trump said the Federal Reserve would be wrong to raise interest rates, putting fresh political pressure on the central bank before Kevin Warsh chairs his first policy meeting.
Bloomberg reported that Trump said raising the benchmark rate would be “the wrong thing to do” and argued the Fed should lower rates instead. Barron’s separately reported that Trump said there was “no reason to raise interest rates,” framing a rate increase as a threat to economic momentum.
Warsh took office as Federal Reserve Board chair on May 22. The Fed said the Federal Open Market Committee also selected him as its chairman, placing him in charge of the central bank’s rate-setting meeting structure. His first FOMC meeting as chair is scheduled for June 16–17.
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The Fed is currently holding the federal funds target range at 3.5% to 3.75%, according to the April 29 FOMC statement and implementation note. That benchmark influences borrowing costs across the economy, including business credit, consumer loans, credit cards, auto financing and mortgage-sensitive markets.
The pressure campaign comes as inflation remains the central competing concern. Reuters reported that the IMF urged the Fed to remain cautious, citing elevated inflation risks. Reuters also reported that Kansas City Fed President Jeffrey Schmid said the central bank faces a choice between patience and possible hikes to restrain inflation.
That leaves Warsh with an immediate test: respond to the White House’s preference for lower rates while preserving the Fed’s credibility as an independent inflation-fighting institution. The next concrete step is the June 17 policy statement and press conference, when markets will look for whether Warsh signals cuts, patience or openness to future hikes.
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