Fed Raises Interest Rates Amid Trump's 'Absurd' Demand for 1% Rate
The US Federal Reserve (Fed) has raised its federal funds rate for the first time in three years, from 3.75% to 4%, due to persistent inflation above target. This move is seen as a necessary tightening of monetary policy, given the investment triggered by AI and Trump's loose fiscal policies.
US President Donald Trump responded with criticism, stating that interest rates should be at 1%, claiming the US has the 'Best Credit in the World, BY FAR', but his argument was dismissed as 'absurd' and 'untrue'. Trump accused the Fed of raising rates for 'political reasons'.
Fed chair Kevin Warsh maintained a neutral stance, refusing to offer support for Trump's demand. He emphasized that the decision to raise interest rates came at a time when the US economy is strengthening and inflation remains above target.