President Trump lashed out after Kevin Warsh, the Federal Reserve chair he nominated, supported a 25-basis-point rate increase — the Fed's first hike since 2023. Warsh confirmed the move, raising the target range to 3.75%–4.00% and emphasized the Fed's independence. Trump posted on Truth Social demanding rates be cut to 1% or lower and later accused the Fed board of being "hostile" while calling Warsh a "good man."
Trump Rebukes Fed After His Pick Backs First Rate Hike Since 2023
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President Donald Trump erupted after the Federal Reserve chair he hand-picked, Kevin Warsh, joined a decision to raise interest rates — the Fed's first increase since 2023. Warsh confirmed a 25-basis-point hike on Wednesday, bringing the federal funds rate to a target range of 3.75%–4.00%.
The president suggested the Fed should cut interest rates to one percent or lower, even as inflation continues to surge amid his costly Iran war. / Donald Trump/Truth Social
Posting on Truth Social about two and a half hours after the Fed's announcement, Trump demanded dramatically lower borrowing costs, writing: "Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR. Our Country is BOOMING with new Investment!" He added that cutting trade with countries with which the U.S. runs deficits could yield an estimated $1.5 trillion annually and insisted, in all caps, "LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!"
The Fed raised interest rates for the first time since 2023. / Andrew Harnik/Getty Images
Warsh Defends Fed Independence
Kevin Warsh, whom Trump nominated in January and who was sworn in in May, addressed the decision at a Wednesday afternoon briefing. He described the Fed's independence as essential to its work, saying, "Part of the independence of the Federal Reserve is we stay in our lane. Independence is a two-way street." Warsh stressed that the central bank lets trade and fiscal policymakers "stay in their lane, too," and said he had nothing to report about "discussions with the president."
Trump said the Fed voted to raise rates
During the briefing Warsh characterized the rate increase as measured and consistent with the Fed's mandate to bring inflation under control while monitoring economic conditions.
Trump's Reaction And Aftermath
Later the same evening, Trump told reporters he did not hold Warsh personally responsible for the Fed's action and instead blamed what he described as a "hostile" and "political" Fed board. A reporter cited Warsh's comment that the rate hike was "the right decision and responsible decision for these interest hikes," and Trump said he was uncertain what Warsh meant, noting that Warsh "doesn't have the votes" and calling him a "good man."
The confrontation highlighted tensions between the White House and the central bank over interest-rate policy. Trump has long urged lower rates and previously criticized Jerome Powell — whom he appointed during his first term — for resisting calls to cut borrowing costs to suit political preferences.
Key fact: The Fed raised its policy rate by 25 basis points to a 3.75%–4.00% range — the first hike since 2023 — and the new chair emphasized the institution's independent role in setting monetary policy.
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