Trump Demands 3% Rate Drop After Warsh Raised it and Threatens More Hikes

President Donald Trump demanded the Federal Reserve slash interest rates to 1% or lower on Wednesday. Fed Chair Kevin Warsh had just lifted rates to 3.75%-4% in the central bank’s first hike since 2023.

The Federal Open Market Committee’s decision was unanimous. Updated projections show 16 of 18 officials expect another increase before year-end, a shift from July’s outlook.

Fed Independence Fight Reignites

The committee also dropped language blaming part of inflation on supply shocks. It now argues the hike supports a quicker return to its 2% target.

Trump aired his frustration on Truth Social within hours of the announcement. He argued that the United States deserves near-zero borrowing costs because of its creditworthiness.

He also claimed that cutting trade with surplus countries could add at least $1.5 trillion a year to federal coffers. He has made similarly large investment claims before, and fact-checkers have called those figures overstated.

LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!

Trump wrote in the post.

The post reopens a fight Trump had let simmer since Warsh took over as Fed chair from Powell. That switch has so far produced zero rate cuts.

Trump had already threatened to cut off trade with surplus countries if the Fed refused to ease policy. That threat touches most of the country’s largest trading partners.

He raised similar demands earlier in September as hike odds kept climbing, with the midterms adding pressure.

White House spokesman Kush Desai told Fox News that Trump still “absolutely” believes in the Fed’s independence. Yet he keeps pressuring it publicly.

Bitcoin and Gold React

Bitcoin’s price jumped in the minutes after Wednesday’s decision, even as it stayed down for the day. Gold spiked at the same time, then gave back its gains, according to BeInCrypto’s coverage of Wednesday.

With traders still pricing in another hike this year, Warsh’s next press conference may decide whether Trump’s pressure campaign escalates further.