Fed raises rates, Trump sees attack

Federal Reserve Chair Kevin Warsh announced a unanimous 25 basis point rate hike to combat inflation. President Trump immediately called it a personal attack, saying it's politically motivated.

“"The plain fact is that inflation is too high and has been for too long."”

Base rate now 3.75% to 4%

The U.S. base rate increased a quarter-percentage-point to 3.75% to 4%, moving opposite the downward direction Trump has been aggressively lobbying for.

Warsh reassures on Fed independence

Warsh's backing of the rate hike and commitment to the Fed's 2% inflation target reassures skeptics that the central bank remains legally independent, despite Trump's nomination of him.

Trump blames the board, not Warsh

Trump told reporters Warsh has a "very hostile" board that's "very political." He said the chairman "might as well vote with the board because it's not going to matter."

“"The board is very hostile, they're very political, they're doing the wrong thing."”

Trump frames hike as political

Trump claimed the economy is "doing so well" it can "barrel through" higher rates, then suggested the rate hike was purely political: "It's a raise against Trump."

“"It's a raise against Trump."”

Inflation stuck above 2% for five years

Inflation currently sits at 3.4%, driven partly by Middle East oil market shocks. The Fed's 2% target hasn't been met in over five years, making the rate hike economically justified.

Warsh faces credibility test before midterms

Trump's public criticism complicates Warsh's efforts to assure markets he's acting independently. With inflation a top voter concern ahead of midterms, the Fed chair must navigate both economic reality and political pressure.