Trump's Rate Hike Push May Be Futile Amid Rising Market Expectations

President Donald Trump renewed his push for lower US interest rates on Sunday, reiterating that the country should have the lowest rates of any nation in the world. Speaking at the Irish Open golf tournament in Doonbeg, Ireland, Trump said he didn't know whether the Federal Open Market Committee would raise the benchmark rate at its meeting this week, but argued that America's economic strength and credit standing make the case for lower rates.

Trump's remarks came less than a week after the Labor Department reported that the core Consumer Price Index posted its largest monthly increase in four months. This data reinforced market expectations of a Fed rate hike at its September 15-16 meeting, with futures pricing an 86% probability of a hike and a second increase by year-end.

Despite Trump's public pressure on the central bank, analysts see several factors that give Federal Reserve Chair Kevin Warsh room to resist. Rising Treasury yields have given the Fed an indirect tightening tool, while Powell's continued presence on the Fed's Board of Governors allows Warsh to deflect blame for any decisions that anger Trump.