Trump slams Fed chair he appointed over interest rate hike
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U.S. President Donald Trump (Photo: REUTERS/Evelyn Hockstein)
President Donald Trump leveled his harshest criticism to date at Federal Reserve Chair Kevin Warsh, whom he appointed to the post himself, after the Fed raised its interest rate despite the president's demands to lower borrowing costs, Reuters reported on Sept. 16.
Trump issued a sharp statement on his social media platform, Truth Social, demanding the Fed slash interest rates.
"Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World—BY FAR," Trump wrote.
He added: "LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!"
Reuters noted this marked Trump's most direct attack on Warsh since his appointment. At the same time, the leader later told reporters he still trusts the Fed chair.
According to Trump, he spoke with Warsh and told him: "You might as well vote with the board because it's not going to matter. The board is very hostile. They’re very political. They’re doing the wrong thing.”
Warsh has not yet confirmed that the conversation took place.
According to the report, the Fed raised rates despite pressure from the White House. Trump's remarks came shortly after Fed leadership unanimously voted to raise the rate by 0.25 percentage points, to 3.75%-4%.
After the meeting, Warsh called the decision "sober, serious and responsible." He said inflation in the United States remains too high.
"The plain fact is that inflation is too high, and has been for too long," the Fed chair said.
Further rate hikes remain likely. According to the Fed's new projections, 16 of 18 central bank officials expect at least one more 0.25-percentage-point increase before the end of 2026. Only two expect the rate to hold at its current level.
Warsh himself said he does not support publishing predetermined guidance on future monetary policy, and for that reason did not present his own forecast.
In his post, Trump also linked the U.S. trade deficit to interest rates, though the two figures are not directly related.
"The word “Deficit” is nothing more than a fancy word for LOSS. We are “carrying” almost every country in the World, and that cannot go on any longer," the president wrote.
Trump has previously threatened to halt trade with countries with which the United States runs a deficit if the Fed does not move to cut rates.
Throughout the week, the White House publicly pressured the Fed to leave rates unchanged.
At the same time, one former White House official told Reuters that Trump's latest post could be considered a relatively restrained reaction given the broader pressure campaign.
According to the official, the president is making clear he disagrees with the Fed's policy, but without directly blaming Warsh, giving him a derogatory nickname or threatening retaliatory measures against the central bank.
"This summer’s inflation readings do not tell me that underlying trends have improved," Warsh said.
Asked by reporters about a possible meeting with Trump to explain the Fed's decision, the central bank chief was evasive:
"I don't have anything for you on discussions with the president."
How Warsh became Fed chair
Trump appointed Warsh in January to replace Jerome Powell, whom the president had repeatedly criticized for what he called overly slow rate cuts.
Warsh, who took office in June after Senate confirmation, has said he intends to preserve the Fed's independence on monetary policy.
He initially favored holding rates steady but said on Sept. 16 that the inflation situation required action.
NV previously reported that the Fed chair remains committed to his pledge to restore "price stability" and was prepared to raise the benchmark rate as soon as the September meeting if inflation data released in the coming weeks proved high.
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