Fed Chair Implies Trump Is Only Half Right on the Economy Following Rate Hike — SkimNews
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- Federal Reserve raised its benchmark rate 25 basis points to a 3.75%-4.00% range in a unanimous vote — its first hike since 2023 — and updated projections still point to one more increase before year-end.
- Kevin Warsh acknowledged the economy "has indeed strengthened" but called inflation "the problem" at his post-meeting press conference, declining to comment on Trump's reaction or what the president expects next.
- The decision undercuts Trump's persistent push for lower rates: Warsh effectively granted the president half a victory on growth, then hiked anyway, repeating his Jackson Hole line that the Fed is committed to "a discipline, not a decision."
- Bitcoin briefly spiked on the announcement before stabilizing near $75,500, down roughly 0.5% on the day, as Wall Street had priced in a 25-basis-point move for weeks.
- Warsh drew a fence around his own role on artificial intelligence, arguing Fed independence means staying out of AI policymaking and noting that AI policy is "made by other parts of government" — consistent with the five AI task forces he set up earlier this year.
Why it matters: By hiking despite acknowledging growth strength, Warsh chose inflation-fighting over Trump's rate-cut demands and pointed to another increase before year-end — meaning consumers and businesses face continued higher borrowing costs. The Fed publicly defended its independence while validating only the pro-growth half of Trump's economic case.
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