Trump Blasts the Fed But Spares Kevin Warsh After Interest Rate Hike — SkimNews
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- The Federal Reserve voted unanimously on Wednesday to raise borrowing costs for the first time in three years — the opposite of what President Trump had demanded
- President Trump blasted the Fed and reiterated his demand for a rate cut but spared Fed Chairman Kevin M. Warsh from criticism, unlike his previous Fed-related outbursts
- Trump had affirmed in May, standing alongside Warsh at his swearing-in, that he wanted the new chairman to be "independent" and "just do your own thing and do a great job"
- Trump revealed to reporters that he told Warsh before the vote: "you might as well vote with the board because it's just not going to matter," calling other Fed members "hostile" and "political" toward him
- The FOMC includes seven Board of Governors members, the New York Fed president, and four rotating regional bank presidents — with three governors, including Warsh, previously nominated by Trump
- Trump has afforded Warsh more leeway than his predecessor Jerome H. Powell, a shift the article attributes to concern about blowback from interfering with a Fed leader Trump himself installed
Why it matters: The Fed's first rate hike in three years raises borrowing costs for Americans at a precarious economic moment, while Trump's selective restraint with Warsh shows he has calculated that publicly attacking a chairman he personally installed would carry greater political cost than his years-long campaign against Powell — leaving room for the White House to keep pressuring the rest of the board without undermining its own appointee.
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