Here We Go! President Donald Trump Just Threw Fed Chair Kevin Warsh Under the Bus Over Interest Rates.
Key Points
Fed Chair Warsh and the Federal Open Market Committee (FOMC) voted unanimously (12-0) to raise the federal funds target rate by 25 basis points on Sept. 16.
In a recent interview, Trump took a jab at his new Fed chair for not voting against the board over interest rates.
The president’s policies have taken the prospect of rate cuts off the table.
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It's been a year of historic change on Wall Street. We've witnessed the Oracle of Omaha, Warren Buffett, retire as CEO of Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB), stood in awe at the largest-ever initial public offering, and watched the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) launch to several record highs.
But the biggest change of all has been the swearing in of a new Fed chair. On May 22, President Donald Trump's handpicked successor to Jerome Powell, Kevin Warsh, became only the 17th head of the central bank.
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Image source: Official White House Photo by Daniel Torok.
President Trump expected Warsh to guide the Federal Open Market Committee (FOMC) to lower interest rates, but in September, the exact opposite occurred: the FOMC kicked off only its fourth rate-hiking cycle of the 21st century. Now, Donald Trump is throwing his new Fed chair, along with the FOMC, under the bus over interest rates.
President Trump takes a subtle jab at Kevin Warsh over the September rate hike
Feuding with a sitting Fed chair and/or the FOMC is nothing new for President Trump. Shortly after his second non-consecutive term began in January 2025, he regularly criticized now-former Fed Chair Powell and the FOMC for not lowering interest rates quickly enough.
The president has gone on record as suggesting that interest rates should be reduced to 1% or lower, compared with the current federal funds target rate of 3.75%-4.00%.
President Trump called the Federal Reserve Board "very hostile" and "very political" after the central bank hiked interest rates by a quarter percentage point on Wednesday.
— CBS News (@CBSNews) September 17, 2026
Trump said he still has confidence in Kevin Warsh as Fed chair and is "relying on" him, even though "he… pic.twitter.com/YvKzHzq6rd
Although Trump has repeatedly demonstrated support for new Fed Chair Warsh and ongoing contempt for the other 11 FOMC voting members, he's begun subtly turning the tables on the new head of the central bank. In a recently published Time interview, he noted:
It's a problem because we have a very hostile Fed board. I don't blame Kevin Warsh. I probably would have voted against the board if I were him.
In other words, Warsh was subtly thrown under the bus by Trump for voting unanimously with the other 11 FOMC members to raise the federal funds target rate by a quarter percentage point on Sept. 16.
Image source: Getty Images.
President Trump's policies have taken the possibility of rate cuts off the table
While Fed Chair Warsh is an easy scapegoat as the figurehead of the central bank, the prominent reason interest rates are rising rather than declining is a pair of President Trump's policies.
The president's tariff and trade policy has been lifting consumer prices for more than a year. Though the Trump administration's tariffs have gone through several iterations, the common thread is that adding duties to unfinished imported goods is, in some instances, raising production costs and increasing consumer prices.
But the most visible impact on consumer prices, and arguably the biggest headwind for the Dow, S&P 500, and Nasdaq Composite at the moment, is the Trump-led Iran war. The ongoing closure of the Strait of Hormuz has disrupted the global energy supply chain, sending fuel prices soaring.
U.S. DIESEL HITS FRESH RECORD AT $6.53
— *Walter Bloomberg (@DeItaone) September 22, 2026
U.S. diesel prices climbed to a record $6.527 per gallon, up sharply from $3.688 a year ago.
Supply is tightening as Russian diesel exports remain restricted and disruptions continue to crude flows through the Strait of Hormuz.…
Furthermore, Iran-war-driven inflation has reached the broader U.S. economy (e.g., rerouted shipments and altered supply chains are adding to consumer prices). As this inflation digs in its heels, Fed Chair Warsh and his colleagues will likely have no choice but to get more aggressive with rate hikes to reverse persistently elevated inflation.
The prospect of rate cuts might be off the table entirely until well after the Iran war ends.
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