Warsh Defies Trump Again: FOMC Raises Rates as Inflation Remains a Concern

Kevin Warsh, Chair of the Federal Open Market Committee (FOMC), defied President Donald Trump by raising interest rates at the September meeting. The committee unanimously voted to increase the federal funds rate by a quarter point to a range of 3.75% to 4%. This decision comes despite the president's desire for lower rates.

The FOMC's move was widely anticipated, but it still represents a significant shift in policy. Warsh has now gone against Trump's wishes twice, and his comments after the meeting suggest he may do so again. In his post-meeting press conference, Warsh stated that the Fed 'must be confident' that underlying inflation is moving toward its objective clearly and at sufficient speed.

This statement implies that Warsh will prioritize controlling inflation over Trump's desire for lower rates. The FOMC may raise interest rates again in October or December, with CME Group's FedWatch tool placing the chance of a hike at close to 58% in October and over 90% by December.