Trump Backs Warsh Despite Rate Hike, Seeks 1% Interest Rates
US President Donald Trump expressed confidence in Federal Reserve Chair Kevin Warsh despite criticizing the central bank's decision to raise interest rates for the first time since 2023. The rate hike, which was unanimous among Fed members, brought the target range to 3.75% to 4%.
The move is a departure from Trump's repeated calls for lower borrowing costs, with him renewing his demand for US interest rates to be reduced to 1% or lower. He acknowledged speaking to Warsh ahead of the vote and suggested he should act independently.
According to the Fed, the rate increase aims to support inflation returning to its 2% target, while describing economic activity as expanding at a solid pace. Updated projections indicate most Fed officials see a higher federal funds rate as appropriate by the end of 2026, although the outlook remains uncertain.