The Federal Reserve has raised the interest rate as fears of inflation persist despite economic optimism from President Donald Trump.
On Wednesday, the Fed voted unanimously to increase interest rates by a quarter of a percentage point, the first rate-hike since 2023.
‘We should have the LOWEST RATE of any country in the World.’
“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little,” a press release from the Fed said.
“Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.”
New Fed Chairman Kevin Warsh voted to increase the rate even though Trump has repeatedly called for rate cuts to keep the U.S. economy growing.
The latest jobs report released two weeks ago showed impressive gains in August and revealed that reports from previous months had been revised upward.
In response to the jobs report, Trump posted, “Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago! A STRONG COUNTRY MEANS A LOWER INTEREST RATE — IT’S A BETTER CREDIT … Very simple! We should have the LOWEST RATE of any country in the World.”
He even threatened to “STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT” if the Fed failed to lower rates.
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Michael M. Santiago/Getty Images
The White House did not respond to a request for comment from Blaze News.
The rate-hike is the first major Fed move under Warsh’s leadership. Trump nominated Warsh to replace Chairman Jerome Powell, who officially stepped down in May after repeatedly butting heads with Trump, especially regarding interest rates.
Trump even took to calling Powell “Too Late,” claiming that the then-chair’s failure to lower rates was stifling the American economy. Trump blamed Powell’s obstinance on “gross incompetence, total dishonesty, or both.”
For his part, Warsh has been tight-lipped about his plans at the Federal Reserve, claiming back in August that he prefers to have a “good family fight” about interest rates and other decisions rather than tip his hand ahead of time.
Wall Street has mainly responded favorably to the rumors about the impending rate increase. The NASDAQ and S&P opened Wednesday with gains, while the Dow Jones opened slightly down. Immediately after the hike announcement, all three markets were in the green.
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