Fed Raises Rates, Defying Trump's Demands for Cuts

The Federal Reserve raised interest rates by a quarter percentage point on Wednesday, a unanimous decision that defied President Donald Trump's public demands for lower borrowing costs. The Federal Open Market Committee lifted the federal funds rate to a target range of 3.75% to 4%, marking the first increase since 2023. Fed Chair Kevin Warsh, who was appointed by Trump earlier this year, stated the hike was necessary because inflation remains too high and has persisted above the central bank's 2% target for more than five years. The decision immediately drew a rebuke from President Trump, who wrote on Truth Social, "LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!" He demanded rates fall to 1% or lower. However, in a notable shift from his treatment of Warsh's predecessor, Jerome Powell, Trump did not personally attack the new Fed chair. Instead, he blamed the rate hike on a "hostile" and "political" Fed board. "I talked to Kevin, and I said, 'You might as well vote with the board because its not going to matter,'" Trump told reporters, framing the increase as a political move against him.