Trump still has confidence in his Fed’s chairman, despite the rate increase to 4%
President Donald Trump said he has confidence in the recerntly appointed Federal Reserve chair Kevin Warsh and found a way to justify the central bank’s decision to increase the benchmark interest rate to 4%, the first since 2023.
In a recent campaign stop in North Carolina, President Donald Trump expressed his confidence in Federal Reserve Chair Kevin Warsh while defending the decision to raise the benchmark interest rate to 4%. According to Trump, "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." He then informed Warsh, "You might as well vote with the board. It’s not going to matter."
The Federal Open Market Committee (FOMC) voted 12-0 to increase the key interest rate by 0.25 percentage points, or 25 basis points. The FOMC stated that inflation remains elevated, and the policy action aims to support a more timely return to the 2% objective.
Chairman Kevin Warsh acknowledged that inflation has been "too high... for too long" and emphasized the need for confidence that underlying inflation will move towards the objective. However, Trump continued to insist that the US central bank should "slash interest rates to 1% or less" due to the country's exceptional creditworthiness.
White House spokesman Kush Desai stated that Trump still believes in the independence of the Fed, but the president has a First Amendment right to express his opinions when things go awry. The FOMC projected that another interest rate increase could occur before the end of 2026.
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