Vance urges Fed rate cuts, days after Warsh hints at hike — SkimNews
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- JD Vance told reporters at a White House briefing Thursday that the Fed should be lowering interest rates, calling it the "proper and responsible" response to recent U.S. inflation data and saying it "would be nice to have some help from the Federal Reserve."
- Kevin Warsh, Trump's handpicked Fed chair, hinted days earlier at the opposite direction, saying at Jackson Hole that he is committed to returning inflation to the Fed's 2% target and calling short-term rates "the predominant tool to achieve the dual mandate."
- Vance's remarks fuel concerns about the erosion of Fed independence under Trump, who aggressively pushed Warsh's predecessor to slash rates and is attempting to fire Governor Lisa Cook.
- Traders are about evenly split on the odds of a rate hike at the Fed's Sept. 15-16 meeting, according to CME Group's FedWatch gauge.
- Fed Governor Michael Barr said Tuesday he would be prepared to back a rate increase if inflation stays elevated, while Governor Christopher Waller said Thursday morning he is more likely to keep rates steady.
Why it matters: The September 15-16 FOMC meeting is shaping up as a live test of Fed independence, not a foregone conclusion: Trump's own appointee (Warsh) is signaling possible hikes, two governors are publicly split (Barr open to a hike, Waller leaning hold), and CME-tracked traders sit at roughly 50/50. Vance's lobbying lands squarely in that contested window, with the political pressure now aired in public and the rate decision genuinely uncertain.
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