Trump Backs Warsh, Slams Fed Board as 'Political'
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- Trump called Fed Chair Kevin Warsh 'fantastic' on Air Force One but slammed other board members as 'very political' with 'bad intentions' for opposing rate cuts.
- Trump said the U.S. should have the lowest interest rate in the world 'like it used to be 30 years ago' and claimed GDP growth could hit 8-12% if rates were lower.
- The FOMC releases its next interest rate decision in two days; per CME FedWatch, markets are pricing roughly a 1-in-3 chance of a quarter-point hike, with holding seen as more likely.
- Dallas Fed President Lorie Logan, a voting FOMC member this year, explicitly called for benchmark rates to be 'modestly higher' citing persistently high inflation.
- The Fed's benchmark overnight rate sits at 3.5%-3.75% — in line with the Bank of England but above the ECB (2.25%), Bank of Japan (1%), and China's 3%.
Why it matters: Trump's public pressure lands two days before the FOMC meeting, where a voting member (Logan) is already calling for tighter policy and markets price a 1-in-3 chance of a hike — not a cut. If the Fed holds or hikes, Trump will be publicly attacking the institution led by the very appointee he just praised, sharpening the conflict over Fed independence.
