Trump vs Warsh: Federal Reserve Interest Rate Showdown Looms
The Federal Reserve chief, Kevin Warsh, is on a collision course with Donald Trump over interest rates.
US job numbers surged in August, exceeding expectations and sparking bets that the Fed will raise rates by a quarter of a percentage point this month.
However, Trump took a contrary view, stating 'A strong country means a lower interest rate' on social media, and even threatening to stop trading with certain countries if they don't come down.
This has put immense pressure on Warsh, who was selected by Trump to take over at the central bank earlier this year. Markets are increasingly convinced that the Fed will have to raise rates to quell high inflation.
Kathleen Brooks, research director at XTB, said it's a 'big test for Warsh', and how he reacts will impact the Fed's independence and global bond markets.