Federal Reserve is expected to raise its benchmark rate, defying President Trump's demands
Markets expect a quarter-point increase as hotter inflation pressures the Fed to keep tightening despite Trump’s call for lower rates.
- Federal Reserve Chairman Kevin Warsh will announce the central bank's policy decision on Wednesday, with markets heavily betting on a 0.25 percentage point rate hike to a 3.75%-4.00% range.
- Surging oil prices above $100 and August payrolls increasing by 162,000 have pressured the Fed, as inflation remains 140 basis points above the 2% target. This reverses 2026 expectations of rate cuts.
- Markets now assign 90.7% probability to the hike, while producer prices rose 5.4% over the prior year and headline inflation increased 3.4% year over year. Core CPI rose 2.4%.
- President Donald Trump's Republican party defends slim congressional majorities before November elections, adding political sensitivity to Warsh's decision despite Trump's earlier expectation that the Fed chair would cut rates.
- Economists expect the Fed to signal further tightening ahead, as Chairman Warsh attempts to maintain institutional credibility by walking a 'fine line' in his post-meeting remarks without providing forward guidance.
72 Articles
72 Articles
Trump’s Fed Chairman Poised to Hike Rates
“President Trump spent last year demanding rate cuts from the Federal Reserve. Investors now expect his handpicked chairman to reverse course and start raising them this week,” the Wall Street Journal reports. “The case for raising rates is a measure of how much the outlook has shifted since Kevin Warsh took over the central bank […]
Trump wanted lower interest rates, but wish-fed boss Kevin Warsh could now increase them. The decision will be a test for Fed independence and markets.
Don’t Knock Kevin Warsh if the Fed Doesn’t Raise Interest Rates
The Federal Reserve’s Open Markets Committee, or FOMC, meets September 15 and 16 to decide whether to raise interest rates, lower interest rates, or leave them the same. I suspect Fed Chair Kevin Warsh will leave them the same. If he does so, the business press will portray that as a craven surrender to President Donald Trump. But if you think, as I do, that the August jobs report was a fluke, then leaving rates where they are is a good call.The…
Hawaii Tribune-Herald
Fed’s table is set for a rate hike, a first under Warsh
Federal Reserve Chairman Kevin Warsh dislikes giving any guidance about the likely path of U.S. interest rates, but elevated inflation, oil at more than $100 a barrel, and his own emphasis on the need to deliver price stability and to pay attention to signals from financial market pricing appear to leave little doubt about what’s next.
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