President Donald Trump expressed confidence in Federal Reserve Chair Kevin Warsh but demanded the central bank slash interest rates to 1% or less, hours after the Fed raised rates for the first time since 2023.
The decision followed weeks of pressure from Trump, who has repeatedly claimed the U.S. economy is thriving and that rates should be 1%, or less, because we are the Best Credit in the World — BY FAR. Trump’s comments came hours after the Fed’s announcement, during a campaign stop in North Carolina. The board is very hostile. They’re very political. They’re doing the wrong thing,
he said, accusing the central bank of raising rates to make Trump do as bad as they can possibly can do.
Trump also reiterated his threat to cut off trade with countries that have a trade deficit with the U.S., a move he said would generate at least 1.5 Trillion Dollars a year. If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year,
Trump claimed in a Truth Social post. This threat came less than two weeks after he warned that if the Fed doesn’t cut rates, he will cut off trade with countries that have trade surpluses with the U.S., a group including most of the U.S.’s top trading partners.
Trump still has confidence in Fed's Warsh, wants lower
Warsh, who was nominated by Trump as Fed chair, defended the rate hike as appropriate, calling it a widely expected move. However, Trump alleged he had advised Warsh to vote with the board, suggesting the Fed chair had already aligned with the majority. “I talked to Kevin and I said, ‘You might as well vote with the board because it’s not going to matter,’ Trump told reporters. The White House responded to Trump’s remarks by emphasizing Warsh’s independence. Senior Deputy press secretary Kush Desai told Fox News that Trump “absolutely” still believes in the Fed’s autonomy, though he criticized the decision as not backed by a particularly compelling economic case. Desai also defended Trump’s right to speak out, saying, the president of the United States has a First Amendment right
to speak out when things go awry.
Trump’s campaign rhetoric included exaggerated claims about U.S. economic performance, such as asserting the country had raked in as much as $20 trillion during his second term. Fact-checkers have disputed these figures, though the White House cited a separate claim that Trump had secured more than $11 trillion in new U.S. investment by September 9, 2026. The Fed, meanwhile, signaled that another rate hike could come before year-end, citing “elevated” inflation as a concern. Inflation remains elevated,
the FOMC stated in a post-decision release, while updated projections showed a strong majority of Fed officials expected another rate increase.
Warsh, in a press conference, emphasized the Fed’s commitment to price stability, calling independence a “two-way street” and urging other branches of government to stay out of monetary policy. We’ll let people that do trade policy and fiscal policy stay in their lane too,
he said. The central bank’s updated projections showed a majority of officials expected further tightening, despite Trump’s public demands for rate cuts. Warsh voted along with all of his colleagues on the committee to raise rates but didn’t offer a projection about future rate hikes and dodged questions about politics and the president multiple times.
Trump slams the Fed rate hike, says he told
Trump’s latest pressure campaign has reignited tensions between the White House and the Fed, with the president threatening to use trade policy as a lever to force rate cuts. The outcome of this standoff could have significant implications for monetary policy, market stability, and the broader economic landscape in the months ahead. The Fed’s decision to raise rates despite Trump’s demands underscores the central bank’s commitment to its dual mandate of price stability and maximum employment, even as political pressures intensify.
Trump’s comments may undercut his and Warsh’s promises that the Fed has independence from the White House. I want him to be independent,
Trump said, though he later suggested he had influenced Warsh’s voting. “I do,” Trump told reporters when asked after arriving on a campaign trip to North Carolina if he still had confidence in Warsh. I’m relying on Kevin, but he’s got, you know, a very tough board, he’s got a board that was put there by other people.
The FOMC’s statement after the rate hike noted that Inflation remains elevated,
reflecting the central bank’s focus on curbing price pressures despite political headwinds.
Warsh, in a press conference Wednesday afternoon, demurred on the question of presidential involvement in the Fed decision, telling reporters, I’ve got nothing for you on a discussion with the president.
The president, who has spent more than a year calling for lower rates, first posted on Truth Social that rates should be dropping and that the trade deficit was a reason to LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!
days after he threatened to stop trading with countries that have a trade deficit unless the Fed cuts rates. Less than two weeks earlier, Trump threatened that if the Fed doesn’t cut rates, he will cut off trade with countries that have trade surpluses with the U.S.
Trump has now repeatedly praised Warsh personally while also calling the FOMC “political” for not lowering rates. Just this past weekend, the president also again stated his view that the U.S. should have the lowest interest rates in the world. The Fed’s decision to raise rates for the first time since 2023 has intensified the ongoing clash between the White House and the central bank, with Trump’s rhetoric highlighting the challenges of maintaining monetary policy independence in an era of heightened political polarization.