“They’re raising the rates to make Trump do as bad as they can possibly can do.” President Donald Trump said that on Wednesday, September 16, hours after the Federal Reserve raised interest rates for the first time since 2023.
The Federal Open Market Committee voted unanimously for a quarter-point increase, which puts the benchmark rate in a target range of 3.75% to 4%. Chair Kevin Warsh, whom Trump nominated, voted with the majority and called the move appropriate. The committee’s statement said “Inflation remains elevated,” and updated projections showed a strong majority of officials expect another hike could follow. At his news conference, Warsh said the plain fact is that inflation “is too high and has been for too long.” WBIW reported that rising energy prices tied to the conflict with Iran have worsened the picture in recent months.
Trump on Warsh and the board
Speaking to reporters after landing in North Carolina for a campaign trip, Trump said he still has confidence in Warsh. “I’m relying on Kevin, but he’s got, you know, a very tough board,” he said, adding that the board was put there by other people. He said he told Warsh he might as well vote with the board because it would not matter. The president called the board “very hostile” and “very political.”
Asked whether he thought Warsh had acted on anything Trump told him, he answered, “No, I don’t think so.” CNBC noted that the comments could undercut promises from both men that the Fed is independent of the White House. White House spokesman Kush Desai told Fox News that Trump “absolutely” still believes in that independence, but that the president has a First Amendment right to speak out when things go wrong.
The Truth Social demand
Earlier that day, Trump posted that rates in the United States “should be 1%, or less, because we are the Best Credit in the World — BY FAR.” He wrote, “LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!” The post also claimed the country is booming with new investment. Trump has repeatedly said the U.S. has taken in $20 trillion or more during his second term. CNBC reported that fact-checkers say those figures are false, and that the White House said on Sept. 9 that he has secured more than $11 trillion in new investment.
The pressure has been building. Less than two weeks earlier, Trump threatened to cut off trade with countries that run surpluses with the United States if the Fed does not cut rates. CNBC said that threat reignited a pressure campaign that had eased after Warsh took over from Jerome Powell. Until now, Trump and his aides have avoided attacking Warsh by name.
What it means for borrowers
Fixed-rate mortgages, personal loans and CDs are unaffected. Most credit card APRs follow the prime rate and, WBIW said, will likely rise within one to two billing cycles. Rates on new mortgages and car loans are expected to climb. Savings and money market yields may edge up.
Sources
- Trump blasts Federal Reserve after first interest rate hike in over three years | WBIW
- Trump still has confidence in Fed's Warsh, wants lower interest rates
