Fed Chair Implies Trump Is Only Half Right on the Economy Following Rate Hike — SkimNews
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- The 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.
- Chair Kevin Warsh told reporters the economy 'has indeed strengthened' but called inflation 'the problem,' partially agreeing with Trump on growth while hiking rates against Trump's demand for cuts.
- Warsh declined to comment when asked about Trump's reaction, repeating his Jackson Hole line: 'We will deliver price stability. We're committed to a discipline, not a decision.'
- Bitcoin briefly spiked on the news but stabilized near $75,500, ending the day down about half a percent, as Wall Street had priced in the 25-basis-point move for weeks.
- Warsh drew a line around Fed independence on AI, saying policy decisions on AI are made by other parts of government and the Fed will focus only on the technology's economic implications.
- The Fed's updated projections still point to one more hike before year-end, meaning Wednesday's move likely won't be the last.
Why it matters: Warsh's split-screen framing — strong economy plus persistent inflation — gives the Fed cover to keep hiking despite months of Trump pressure for cuts, and the board's own projections point to one more move before year-end. Rate-sensitive sectors and Bitcoin holders now face a Fed willing to override political pressure on monetary policy.
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