# Fed rate hike test for Warsh and Trump

> The Federal Reserve faces a credibility test as it prepares to raise rates for the first time since 2023, putting Chair Kevin Warsh at odds with President Trump's preference for lower borrowing costs.
- Title: Fed rate hike test for Warsh and Trump · Yahoo Finance
- Summary: The Federal Reserve faces a credibility test as it prepares to raise rates for the first time since 2023, putting Chair Kevin Warsh at odds with President…
- Keywords: federal reserve, kevin warsh, interest rate hike, donald trump, monetary policy, inflation, treasury yields, oil prices, financial markets, fed credibility, business, finance
- Source: Yahoo Finance — https://finance.yahoo.com/news/morning-bid-time-hike-104329450.html
- Published: 2026-09-16T10:43:29+00:00
- Read time: 1 min
- Topics: federal reserve, kevin warsh, interest rate hike, donald trump, monetary policy, inflation, treasury yields, oil prices, financial markets, fed credibility, business, finance
## Fed poised for first rate hike since 2023
Markets expect the Federal Reserve to raise rates by a quarter point to 3.75%-4.00% today, driven by persistent inflation above target and a low unemployment rate.
## Warsh caught between inflation and Trump
Fed Chair Kevin Warsh risks losing credibility if he doesn't follow through on a hike, but doing so puts him at odds with President Trump, who wants the lowest borrowing costs in the world.
## Trump threatens retaliation over Fed rates
President Trump recently threatened to stop trading with countries if the Fed doesn't cut rates, though markets have largely dismissed the threat as bluster.
## Treasury yields breach 5% barrier
The 10-year Treasury yield hit a 19-year high of 5.041% on Tuesday, driven by expectations of Fed tightening and resurgent oil prices stoking inflation fears.
## Middle East tensions push oil above $100
Brent and WTI crude both hit their highest levels since May 19 after Saudi Arabia suspended loading operations at its Yanbu port, with Brent up 19% since the start of the month.
## Warsh's messaging will guide market expectations
Fed Chair Warsh is famously averse to forward guidance, so his every word at the 2:30 p.m. press conference will be scrutinized for clues about whether today's hike is a one-off or the start of a new tightening cycle.
## Trump administration balances AI safety and competition
Treasury Secretary Bessent defended the Trump administration's AI strategy at a congressional hearing, emphasizing the need to balance safety concerns with competitiveness against China.
## Key takeaway

The Fed's first rate hike since 2023 will signal whether it prioritizes inflation control over political pressure, with Warsh's messaging crucial to market expectations.