Market Insight: Fed Chief Warsh Can Only Make Himself Unpopular Now
With his demand for lower interest rates, Trump is also putting pressure on Powell's successor. Regardless of how the next decision turns out: Warsh has only bad options, Astrid Dörner thinks.
US President Donald Trump is demanding explicit interest rate cuts from Federal Reserve Chair Kevin Warsh, threatening to halt trade with countries with which the US has a trade deficit if the Fed doesn't comply. This could impact nearly half of the US's trade partners, including Mexico, China, and Taiwan, potentially leading to higher prices.
A number of US Fed officials, supported by strong job market data, are also arguing against rate cuts, which could fuel inflation. Warsh is caught between the risk of inflation if he cuts rates or leaves them unchanged, and the potential consequences of a trade halt.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
