# Fed Chair Defies Trump on Rate Hike

> US Fed raises rates despite Trump's pressure, sparking credibility debate
- Title: Fed Chair Defies Trump on Rate Hike · Malay Mail | Shortify
- Summary: US Fed raises rates despite Trump's pressure, sparking credibility debate Fed chair Kevin Warsh defied Trump by raising rates but faces questions about…
- Keywords: us federal reserve, kevin warsh, president donald trump, interest rate hike, inflation, fed independence, white house, fomc, news, world, Fed, Chair
- Source: Malay Mail — https://malaymail.com/news/money/2026/09/18/in-our-lane-us-feds-warsh-defies-trump-but-credibility-questions-persist/235611
- Published: 2026-09-18T10:57:04+00:00
- Read time: 1 min
- Topics: us federal reserve, kevin warsh, president donald trump, interest rate hike, inflation, fed independence, white house, fomc, news, world
## Rate hike decision
US Federal Reserve raised interest rates by 25 basis points to 3.75-4.00% amid high inflation

> The Fed on Wednesday raised rates in the world's largest economy by 25 basis points to tackle stubbornly high inflation
## Trump's pressure
Trump demanded lower rates and accused Fed of being uncooperative with his economic policies

> Trump told reporters he spoke with Warsh before the Fed's meeting, telling him to do what he wants
## Warsh's response
Warsh defended Fed independence by saying they stay in their lane

> We let people that do trade policy and fiscal policy stay in their lane too
## Economist analysis
Economists say rate hike was needed to combat persistent inflation trends

> Inflation has been above the Fed's two percent target for more than five years
## Credibility debate
Trump claims he gave Warsh permission to raise rates, but Warsh says he didn't

> Warsh isn't talking and Trump isn't a reliable narrator
## Inflation context
Inflation surged due to Iran war and Trump's trade policies

> Inflation had been on a downward trajectory but prices surged after Trump's war on Iran
## Market reaction
Financial markets view Warsh's decision as credible despite White House pressure

> Warsh has shown he has steel in his spine by increasing interest rates seven weeks before the midterm elections
## White House stance
White House claims inflation is due to previous administration

> Trump advisor Kevin Hassett said there was no need for a rate hike to tackle inflation
## Fed's position
Fed says inflation data shows price rises are not temporary

> Inflation data over the summer did not suggest price rises were transitory
## Key takeaway

Fed chair Kevin Warsh defied Trump by raising rates but faces questions about independence