Analysis: Trump said he loves inflation. Why that should be music to Kevin Warsh's ears
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- Trump declared "I love the inflation" in the Oval Office hours after the BLS reported May CPI jumped 4.2% annualized — the highest reading in three years.
- Kevin Warsh faces his first Fed rate-setting meeting next week, with market odds overwhelmingly favoring a hold at 3.5%-3.75%.
- Fed officials Lorie Logan and Beth Hammack have said they'd rather not cut and that rate increases might be in order, citing Iran-war energy price spikes through the Strait of Hormuz.
- Trump told NBC he wants higher interest rates but wants Warsh to "do whatever he wants" — a sharp reversal from his years-long attacks on Powell, whom he called "stupid."
- Trump attempted to fire Fed governor Lisa Cook, and U.S. Attorney Jeanine Pirro launched a criminal probe into Fed renovation cost overruns; a judge has blocked both efforts, leaving Trump with fewer levers against Warsh.
- Warsh's first press conference as Chair is scheduled for June 17.
Why it matters: With courts having blocked Trump's prior tools for pressuring the Fed — the Lisa Cook firing and the Pirro criminal probe — the president has fewer means to leverage Warsh, and with Dallas and Cleveland Fed presidents already publicly floating rate increases, Warsh enters his June 17 press conference with both presidential goodwill and a hawkish-leaning bench.
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