President Donald Trump said Wednesday he retains confidence in Federal Reserve Chair Kevin Warsh even as he demanded the central bank slash borrowing costs to one percent or lower, hours after the Fed delivered its first rate increase since 2023.
The decision and the reaction
The Federal Open Market Committee voted unanimously to raise the benchmark target range by 25 basis points to 3.75 percent to 4 percent. Warsh, whom Trump nominated for the chairmanship, described the move as appropriate. Updated projections released alongside the statement showed a strong majority of officials penciling in another increase ahead. The committee's accompanying statement noted that inflation remains elevated.
Presidential pressure in public and private
Trump told reporters in North Carolina that he still has confidence in Warsh, adding that he had spoken with the chair and suggested voting with the board because it would not matter otherwise. He characterized the board as hostile and political, claiming its members were installed by others and were raising rates to damage his political prospects. Asked whether Warsh had acted on his direction, Trump said he did not think so and insisted he wants the chair to be independent.
The social media demand
On Truth Social, the president wrote that the United States is carrying almost every country in the world and demanded rates be lowered fast. He argued the U.S. deserves a rate of one percent or less because it is the best credit in the world by far. The post repeated claims that the country has attracted as much as twenty trillion dollars in new investment during his second term. Fact-checkers have labeled those figures false. The White House said on September 9 that Trump has secured more than eleven trillion dollars in new U.S. investment.
Trade threats and the independence claim
Less than two weeks earlier, Trump threatened to cut off trade with every nation running a surplus with the United States, a group that includes most major trading partners. He claimed Wednesday that halting trade with deficit counterparts would generate at least one and a half trillion dollars annually. The president and his advisers have so far avoided criticizing Warsh by name. White House spokesman Kush Desai said Trump absolutely believes in Fed independence but retains a First Amendment right to speak out when things go awry.