From CNBC · Kevin Breuninger,Dan Mangan · · 1m 50s
Trump demands Fed slash rates despite Warsh rate hike
President Trump says he still backs Fed Chair Warsh but is demanding interest rates drop to 1% or less, reigniting his pressure campaign on the central bank.
In brief
President Trump says he still backs Fed Chair Warsh but is demanding interest rates drop to 1% or less, reigniting his pressure campaign on the central bank. Trump is publicly pressuring the Fed to cut rates while claiming to support Chair Warsh's independence, creating tension between his stated confidence and his…
Trump backs Warsh but wants rate cuts
Trump said he still has confidence in Fed Chair Kevin Warsh, whom he nominated, but demanded the central bank slash interest rates to 1% or less.
“I do. I'm relying on Kevin, but he's got a very tough board.”
Fed raises rates for first time since 2023
The Federal Reserve announced a 25 basis point rate increase to 3.75% to 4%, the first hike since 2023. The decision was unanimous among the 12-member Federal Open Market Committee.
Warsh defended the rate increase
Fed Chair Warsh, Trump's nominee, defended Wednesday's rate increase as appropriate. He said the decision was necessary because inflation remains elevated.
Trump told Warsh to vote with the board
Trump said he told Warsh to vote with the board on the rate hike, claiming it wouldn't matter. He also called the board hostile and political, saying they're raising rates to hurt him.
“You might as well vote with the board. It's not going to matter.”
Trump demands rates drop to 1% or less
Trump posted on Truth Social demanding the Fed lower rates to 1% or less, claiming the U.S. is the best credit in the world and shouldn't carry other countries' economies.
“LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!”
Trump threatens trade war if rates don't fall
Less than two weeks earlier, Trump threatened to cut off trade with countries that have trade surpluses with the U.S. if the Fed doesn't cut rates, reigniting his pressure campaign.
White House claims Fed independence remains intact
White House spokesman Kush Desai told Fox News that Trump absolutely believes in Fed independence, but said the president has a First Amendment right to speak out when things go wrong.
The takeaway
Trump is publicly pressuring the Fed to cut rates while claiming to support Chair Warsh's independence, creating tension between his stated confidence and his demands.
