Trump called for rates of "1%, or less" — against the new 3.75%-4% range — and said the blame belongs to the Fed's board, not to the chair he picked, Kevin Warsh.
The decision. The Federal Reserve raised its target range for short-term interest rates by a quarter point on Wednesday, Sept. 16, to 3.75%-4%. That is the first increase since July 2023, and the first big move by Chair Kevin Warsh. Prices are rising 3.4% a year — the Labor Department's August reading, unchanged from July — well above the 2% pace the Fed aims for. Core prices, which strip out food and fuel, rose 2.4% over the year. The vote was unanimous — Warsh himself voted for the increase. It came seven weeks before the midterm elections, after months of public demands from Donald Trump that the Fed cut instead.
Trump's answer. On Truth Social, he said rates "should be 1%, or less" — roughly three points under the 3.75%-4% the Fed just set. Speaking to reporters after landing in North Carolina, he aimed past his own appointee: "I'm relying on Kevin, but he's got a very tough board."
Where it stands. The new target range is 3.75%-4%, up from 3.5%-3.75%. Traders in interest-rate markets had already bet heavily that the increase was coming.
Catch up
- Sep. 11 — August consumer prices came in at 3.4% for the year and 0.4% for the month, up from 0.1% in July, with gasoline doing most of the monthly work.
- Sep. 12 — Core inflation eased to 2.4%, but markets moved past 80% odds on a Sept. 16 hike.
- Sep. 14 — Trump threatened to cut off trade with some countries unless the Fed lowered rates.
- Sep. 16 — Swaps traders priced a 90% chance of a quarter-point increase hours before the meeting ended.