Trump vs Warsh: Rate Hike Sparks Friction Between White House and Federal Reserve

A rate hike by the Federal Reserve has set off a clash between Donald Trump and Fed Chief Kevin Warsh, who was appointed by Trump to lead the central bank.

The unanimous vote in favor of a quarter-percentage-point hike caught markets off guard, with investors anticipating a more cautious approach from Warsh.

Warsh defended the decision, citing underlying price pressures that refused to fade, and emphasized the institution's independence in making monetary policy decisions.

The rate hike aims to cool down an economy that was threatening to let inflation spiral out of control again, but has also led to a market reaction with major stock indexes tumbling immediately following the announcement.