BREAKING: RUH-ROH! Trump’s handpicked Fed chair RAISES interest rates after Trump said he never would have nominated him unless he wanted them LOWER!
Back in February, Donald Trump made a revealing admission about Kevin Warsh, the man he chose to run the Federal Reserve: Warsh would never have gotten the nomination if Trump thought he was going to raise interest rates.
“I mean, if he came in and said, ‘I want to raise them,’ he would not have gotten the job,” Trump told NBC News at the time. Seven months later, Warsh just did exactly that
The Fed just voted unanimously to raise its benchmark interest rate by a quarter percentage point, bringing its target range up to 4 percent. It was the Fed’s first rate hike since 2023 – and may not be the last: another increase may come later this year, officials said.
That is almost precisely the opposite of what Trump has spent years demanding from the central bank. He repeatedly attacked Warsh’s predecessor, Jerome Powell, for refusing to slash rates as aggressively as Trump wanted, and Trump has continued publicly pressing for lower borrowing costs under Warsh.
Warsh, however, had a problem bigger than presidential expectations.
“The plain fact is that inflation is too high and has been for too long,” he told reporters. The Fed’s official statement said inflation “remains elevated” and that the rate increase was intended to accelerate its return toward the central bank’s 2 percent target.
After Warsh made remarks, a reporter asked him what message he had for Trump about the decision to raise rates.
“I’ve got nothing for you on a discussion with the president,” Warsh replied.
Trump had been explicit about what he expected when he picked Warsh. He said Warsh wouldn’t have gotten the job if he wanted to raise interest rates. Four months into the job, Warsh just raised them.
And now comes the potentially fascinating part. Trump can rage at the Fed, and demand on Truth Social that Warsh lower rates. But he can’t just pick up the phone and order the Federal Reserve to cut them. Warsh gets a vote, not a magic wand, and today’s rate hike was approved unanimously 12-0.
The next scheduled showdown comes Oct. 28, when the rates may go up AGAIN.
Warsh got approved by declaring that the Fed under his leadership will remain independent – and vowed to “disappoint” anyone expecting him to tolerate inflation above the Fed’s 2 percent target.
Now we get to find out whether he meant it.
Trump wanted Kevin Warsh because he thought he was getting a Fed chairman who would lower interest rates.
Instead, he may have hired the man he’s about to spend the rest of the year in yet another fight with his own appointee.