Fed Beats Trump: Interest Rates Hike Despite White House Demand

The Federal Reserve raised interest rates to 4% last week as part of its mission to control inflation. This move was seen as a success for Fed Chair Kevin Warsh and the other members of the Federal Open Market Committee, despite President Donald Trump's demand that borrowing costs be cut.

Instead of cutting rates, the bond market rallied after the announcement, with the 10-year Treasury yield falling 7 basis points to 4.95 percent. This was a surprise move, as rate hikes are typically seen as detrimental to bonds.

Warsh and the Fed have been working to manage monetary policy and control inflation, and this latest move is part of that effort. The 10-year Treasury yield had reached 5.04 percent earlier in the week but dropped back below that level after the rate hike announcement.