Trump Pushes for Lower Rates After Fed’s First Hike in Three Years

On September 16, the Federal Open Market Committee voted unanimously to raise the benchmark lending rate by a quarter-point to a range of 3.75 %–4 %, the first increase in more than three years. Chairman Kevin Warsh, the president’s hand-picked Fed chief, called the move “a sober, serious, responsible decision” aimed at curbing inflation that has lingered above the Fed’s 2 % target. Hours later, President Donald Trump posted on Truth Social that “Interest Rates in the United States should be 1 %, or less, because we are the Best Credit in the World — BY FAR.”

New York Post

Trump appointed Warsh in January 2026 after dismissing former Chair Jerome Powell. Throughout 2025-26 the president repeatedly urged the central bank to cut rates, even threatening trade actions against deficit-bearing nations if the Fed did not comply. Warsh’s decision to raise rates marks a departure from the president’s preferred stance and follows a period of rising inflation, a resilient labor market, and heightened geopolitical risk from the ongoing Iran war.

CNBC

• Kevin Warsh explained the hike: “The plain fact is that inflation is too high and has been for too long.” He added that a stronger economy, persistent inflation, and geopolitical “hot spots” supported the unanimous vote.

CNN

• “Certainly today’s rather unfortunate decision by the Federal Reserve to hike interest rates was not, from the administration’s point of view, backed by a particularly compelling economic case,” — Kush Desai, White House spokesman.

CNBC

Trump shifted part of the blame to the Fed’s Board of Governors, describing them as “very political” and “hostile.” “I’m relying on Kevin, but he’s got a very tough board,” he told reporters. He also suggested the board members would not act in the nation’s best interest.

The Hill

• Rate increase: +0.25 pp to 3.75 %–4 %.

CNN

• Inflation: PCE price index near 4 %, above the 2 % target.

CNN

• Labor market: Unemployment steady at 4.1 %; job growth “picked up sharply” in August.

CNN

• Bond market: 10-year Treasury yield rose above 5 %, its highest closing level since 2007.

CNN

The hike underscores the Fed’s willingness to act independently despite presidential pressure. Warsh’s emphasis on inflation and geopolitical risk signals a continuation of tighter policy, while Trump’s demand for rates at or below 1 % reflects a political narrative linking trade deficits to borrowing costs—an association economists note is largely unrelated. The divergence could test the limits of presidential influence over the Fed, especially as the administration considers further actions against Fed officials, such as the ongoing effort to remove Governor Lisa Cook.

CNN

• Conversation confirmation: Warsh declined to confirm any recent discussion with Trump, whereas Trump claimed he “talked to Kevin,” a statement not corroborated by the Fed chair.

CNBC

• January 2026: Kevin Warsh appointed Fed Chair.

CNN

• September 16: Fed raises rates to 3.75 %–4 %; Trump posts demand for lower rates.

New York Post

• May 22 2026 (scheduled): Trump and Warsh slated to appear together in the White House East Room for a swearing-in ceremony.

CNBC