Trump demands interest rates be lowered 'fast' after Fed announces hike

On Wednesday, US President Donald Trump strongly criticized Federal Reserve Chair Kevin Warsh on social media following the central bank's decision to raise interest rates in an attempt to curb persistent inflation. In a post on his Truth Social platform, Trump expressed his frustration, stating that interest rates in the United States should be "1%, or less" because the country has the "Best Credit in the World — BY FAR." He called for lowering interest rates for the United States of America and urged a swift action.

Trump also appeared to link the United States' trade deficits to the borrowing costs set by the central bank, despite the two issues being largely unrelated. He previously threatened to cut off trade with countries experiencing trade deficits if the Fed did not lower interest rates. Earlier in the week, Trump threatened to cut off trade with countries with which the US had trade deficits if the Fed did not cut interest rates.

The Federal Reserve unanimously decided to raise rates by 25 basis points to 3.75%-4.00%, a move described by Warsh as a "sober decision, serious decision, responsible decision." Inflation has been high and persistent for too long, Warsh said, and rates are likely to increase further. According to new policy projections, 16 of 18 policymakers anticipated at least one more quarter-percentage-point hike by the end of the year, with only two of them expecting rates to remain stable from this point.

Warsh, who was appointed by Trump in January to replace Jerome Powell, who the president frequently criticized for not implementing dramatic rate cuts, took office with a pledge to maintain the Fed's independence in setting monetary policy while working more closely with the White House on other matters. Since his appointment in June, Warsh initially advised the Fed to keep rates steady, although not all policymakers agreed with this approach amidst inflationary pressures. Warsh declined to comment on discussions with Trump regarding the Fed's decision.