Trump Stands by Fed Chair Despite No Rate Cut

US President Donald Trump has expressed his continued support for Federal Reserve Chair Kevin Warsh despite the central bank's decision to keep interest rates unchanged. Speaking in the Oval Office, Trump described Warsh as 'brilliant' and acknowledged that he also wants lower interest rates. However, Trump noted that decisions at the Fed are not made by the chair alone and require the approval of the Board of Governors.

Warsh has indicated that further interest rate increases remain an option for the Fed, citing rising core inflation as a reason to tighten policy. He stated that central banks generally raise rates when core inflation is increasing and lower them when it declines.

The Federal Reserve's decision to keep interest rates at 3.50-3.75% was met with dissent from three members of the Board of Governors, who voted in favour of raising rates. Financial markets are now pricing in a probability of over 60% that the Fed will raise its benchmark rate by 25 basis points at its September meeting.