Trump's Fed Chair Relationship at Risk Amid Rate Hike Expectations
US President Donald Trump's relationship with his newly confirmed Federal Reserve Chair Kevin Warsh may be on shaky ground. Despite calling him 'fantastic' and saying he wants him to do whatever he thinks best, a rate hike could spark public criticism from the President.
The markets expect around two interest rate hikes this year due to rising energy costs from the Iran conflict and some inflation from tariffs. However, the Fed is backing away from forward guidance, making near-term rate moves harder to predict.
Warsh believes the Fed's independence should be earned and points out that it has not achieved its 2% inflation goal in recent years. Trump has attacked the Fed in ways that are historically unusual, including verbally criticizing former Chair Jerome Powell and attempting to fire Governor Lisa Cook.