WASHINGTON, September 17 — The Federal Reserve raised interest rates on Wednesday, drawing an immediate public rebuke from President Donald Trump, who said U.S. rates “should be 1%, or less, because we are the Best Credit in the World — BY FAR.” The decision came at the conclusion of the central bank’s two-day policy meeting and extends a tightening cycle that began in March 2022, when the federal funds rate sat near zero.
Since then the Fed has raised rates multiple times, including four consecutive 75-basis-point increases in 2022, lifting the target range to 4.25%–4.50% by December 2022. Trump’s post on Truth Social is the latest in a series of public comments on monetary policy, which he has frequently linked to U.S. economic competitiveness.
His call for a 1% rate echoes earlier criticisms of the Fed and its chair, Jerome Powell, whom he appointed in 2017. Powell’s term as chair runs through May 2026. The Fed is an independent agency.
Its policy decisions are not subject to direct presidential control, though the president nominates members of the Board of Governors. Trump’s statement did not specify what actions he would take, if any, to influence Fed policy.
The Mandate Behind the Decision
The Fed’s dual mandate — maximum employment and price stability — guides its decisions, with a 2% inflation target. As of the latest data, inflation remains above that target, though it has eased from its June 2022 peak of 9.1%. That gap is the crux of the dispute.
A lower rate would generally stimulate economic activity but could also fuel inflation — the trade-off at the center of the president’s demand and the central bank’s caution. The federal funds rate influences borrowing costs for mortgages, credit cards and business loans, which is why the president’s attention to it carries weight well beyond the Fed’s boardroom.
The Broader Stakes
The U.S. dollar remains the world’s primary reserve currency, a status that supports low borrowing costs. Trump’s argument rests on that standing. The Fed’s rate decisions, by contrast, are based on economic data and its mandate, not on the president’s preferences.
Strategically, the calculus here is familiar. An independent central bank setting policy on data is a pillar of the dollar’s credibility — and credibility is precisely what underwrites the “Best Credit in the World” the president invoked.
Pressure from the White House on rate policy tests that separation without formally breaching it. The Fed’s next meeting is scheduled for later this year. Watch whether inflation data continues to ease toward the 2% target — and whether the president’s public pressure campaign intensifies as Powell’s term as chair approaches its end.
