President Donald Trump made it clear on Wednesday that he still trusts Federal Reserve Chair Kevin Warsh, even though he's pushing hard for a major cut in interest rates. After the Federal Reserve decided to raise rates for the first time since 2023, Trump called for slashing them to 1% or less.
The Federal Open Market Committee (FOMC) voted unanimously to lift the benchmark interest rates to a target range of 3.75% to 4%. Warsh, whom Trump nominated, stood by the 25 basis point increase, calling it the right move. But Trump, speaking to reporters in North Carolina at a campaign stop, said he still has faith in Warsh, despite accusing the board of being politically biased against him.
Trump's remarks are part of his ongoing push to get the Fed to lower borrowing costs. He took to Truth Social to demand immediate rate cuts, arguing that the U. S. economy is doing well and should take advantage of lower rates. Trump has repeatedly claimed that the U. S. has raked in as much as $20 trillion or more during his second term, though fact-checkers dispute this figure.
On social media, Trump suggested stopping trade with countries that have trade surpluses with the U. S. could generate $1.5 trillion a year. This comes after he threatened to cut off trade with such nations if the Fed doesn't lower rates. These countries include many of the U. S.'s biggest trading partners.
Even with the pressure, Trump and his team have avoided criticizing Warsh directly. White House spokesman Kush Desai stressed that Trump believes in the Fed's independence but also supports the president's right to express his views when necessary.
The FOMC's statement after the rate hike noted that inflation remains high, and another rate hike could be on the horizon. Yet, Trump continues to push for lower rates, insisting the U. S. economy is booming with new investments.
Trump's comments highlight his long-running battle against the Fed's interest rate policies, a battle that eased when Warsh replaced Jerome Powell. However, the recent rate hike has reignited his calls for significant cuts, reflecting his belief that lower rates are key to keeping the economic momentum going.
