US President Donald Trump has called for interest rates to be cut to 1% or lower, hours after the Federal Reserve raised rates and signalled further tightening to tackle persistent inflation.
“Interest rates in the United States should be 1 per cent, or less, because we are the best credit in the world — by far,” Trump said in a post on Truth Social.
“Lower the interest rates for the United States of America, and fast!” he added.
The comments came shortly after the Fed unanimously raised its benchmark interest rate by 25 basis points to 3.75% to 4.00% on Wednesday, marking its first hike in more than three years and the first under Fed Chair Kevin Warsh.
Trump has previously pushed for substantially lower borrowing costs and had been critical of the Fed’s approach to monetary policy.
He said he had spoken to Warsh and suggested the Fed chair should support the rate decision because the rest of the board was “very hostile” and “very political”.
Warsh, however, defended the rate increase, describing it as a “sober decision, serious decision, responsible decision” and saying inflation remained too high.
“The plain fact is that inflation is too high and has been for too long,” Warsh said.
The Fed’s latest projections showed 16 of its 18 policymakers expect at least one more 25-basis-point rate hike before the end of 2026, signalling that borrowing costs could remain elevated despite Trump’s calls for lower rates.
Warsh also said recent inflation readings did not show enough improvement in underlying price pressures to justify holding rates steady.
The rate decision has reopened tensions between the White House and the central bank over the direction of monetary policy, with Trump pushing for lower rates while the Fed focuses on bringing inflation back towards its 2% target.
Reuters
