President Trump reacted to Wednesday’s interest rate increase by saying rates “in the United States should be 1%, or less.”
He claimed that “our Country is BOOMING with new Investment” as he discussed the trade deficit as a reason to “LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!” in a post on Truth Social.
Trump had previously threatened to stop trading with countries that have a trade deficit unless the Fed cuts rates but saw the central bank move in the opposite direction this week.
The White House reaction came after Trump’s team tried to telegraph a hands-off approach to the Federal Reserve in recent weeks, but Trump and his team quickly hit back at the decision.
Senior Deputy press secretary Kush Desai also reacted to the move in an appearance on Fox News. Desai said this was a “rather unfortunate decision by the Federal Reserve” that was “not backed by a particularly compelling economic case.”
Desai also claimed that the current price increases are “entirely driven by an energy supply shock.” That was at odds with Federal Reserve Chairman Kevin Warsh, who said Wednesday’s action was taken in part to stem wider price increases.
Trump, in the past, has praised Warsh personally but repeatedly called for lower rates and called the Federal Open Market Committee “political” for not lowering rates. Just this past weekend, the president again stated his view that the US should have the lowest interest rates in the world.
Warsh voted along with his colleagues to raise rates but didn’t offer a projection about future rate hikes and dodged a question during a press conference on Wednesday afternoon about the White House reaction to the rate hike.
“I’ve got nothing for you on a discussion with the president,” Warsh said.
The first missive from the White House came after the central bank unanimously raised interest rates for the first time in three years and signaled one more rate hike is likely before the end of the year, an acknowledgment that the Fed needed to step in to counteract price pressures.
Appointed by Trump earlier this year, Warsh repeatedly underlined that inflation has remained too high and promised that “this committee will deliver price stability.”
Warsh repeatedly dodged politics during a press conference on Wednesday as he called independence of the central bank a two-way street.
“Part of the independence of the Federal Reserve is we stay in our lane, he said. “We’ll let people that do trade policy and fiscal policy stay in their lane too.”
