Trump Calls for 1% Fed Rate as Warsh Hikes, Warns of More

On Wednesday, President Donald Trump urged the Federal Reserve to cut interest rates to 1% or below, just after Fed Chair Kevin Warsh raised them to a range of 3.75%-4%, the first such increase since 2023.

The Federal Open Market Committee voted unanimously on the move. Updated projections indicate that 16 of 18 officials foresee another hike before the year ends, marking a change from the outlook given in July.

Fed Independence Clash Resurfaces

The committee also removed wording that had blamed part of inflation on supply shocks. It now contends that the rate rise accelerates the path back to its 2% target.

Trump expressed his anger on Truth Social just hours after the announcement. He said the United States deserves near-zero borrowing costs due to its strong credit standing.

He also argued that reducing trade with nations running surpluses could bring in at least $1.5 trillion more each year. He has previously made similar grand investment claims, and fact-checkers have labeled those figures as exaggerated.

LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!

That is what Trump wrote in his post.

The post rekindles a dispute that had cooled since Warsh replaced Powell as Fed chair. So far, the leadership change has not produced any rate cuts.

Previously, Trump had warned he might halt trade with surplus countries if the Fed did not ease policy. Such a threat would affect many of the nation's biggest trading partners.

He made similar calls earlier in September as the odds of a hike rose, with midterm elections adding pressure.

White House spokesman Kush Desai told Fox News that Trump still "absolutely" supports the Fed's independence, despite his continued public pressure.

Bitcoin and Gold Respond

Bitcoin's price ticked up in the immediate aftermath of Wednesday's decision, although it remained lower on the day. Gold also jumped briefly before giving back those gains, as covered by BeInCrypto.

With markets still expecting another increase later this year, Warsh's next press conference could determine whether Trump escalates his campaign of pressure.