Federal Reserve earns rebuke from Trump after interest rate hike
Kevin Warsh’s Federal Reserve has raised interest rates for the first time since 2023 and effectively pencilled in another hike this year, defying President Trump’s demands for looser monetary policy. On Wednesday, Warsh joined a unanimous decision to raise the US’s central rate by 25 basis points – or a quarter of a percentage point [...]
Federal Reserve Chair Kevin Warsh, appointed by President Trump, increased interest rates for the first time since 2023, signaling potential further hikes this year. The decision, made unanimously, was in response to persistent inflation above the Federal Reserve's two percent target. Inflation in August remained at 3.4 percent, despite a 27 percent increase in fuel prices due to the ongoing war in the Middle East.
However, President Trump criticized the move, demanding interest rates be reduced to 1 percent or lower. He argued that the US was "carrying" other countries financially and that borrowing costs should be lowered. Analysts expect more rate hikes this year as energy and fuel prices continue to impact inflation. The Federal Open Market Committee members, through their 'dot plot', also signaled a possible further rate increase at upcoming meetings.
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