Trump Blasts Fed Rate Hike as BoE Weighs Energy Price Shock

The Federal Reserve's first interest rate increase in three years has sparked a confrontation between the White House and the central bank. President Donald Trump demanded borrowing costs fall to 1 percent or lower, hours after the Fed unanimously voted to raise rates by a quarter point to a target range of 3.75 percent to 4 percent.

The decision reflected the Fed's judgment that inflation, running above the 2 percent goal, requires a firmer response. Most policymakers signaled another hike could come before year-end. Trump tied his rate demand to trade imbalances, claiming the US would earn at least $1.5 trillion annually if it stopped trading with countries running surpluses against it.

The White House amplified criticism through senior deputy press secretary Kush Desai, who said the Fed's move was 'not backed by a particularly compelling economic case.' Desai argued that price pressures stem from an energy supply shock tied to the Middle East conflict, not overheated demand. He contrasted the current environment with the Biden administration.

The Bank of England is also weighing its response, as British policymakers consider whether a nearly 20 percent surge in energy prices this month forces them to abandon their hold-and-wait stance. The BoE is widely expected to hold its Bank Rate at 3.75 percent for a sixth consecutive meeting, but the calculus has shifted dramatically in recent weeks.