Trump backs Warsh, faults 'hostile' Fed board for rate hike

Skylar Woodhouse, Hadriana Lowenkron and Jeff Mason, Bloomberg News on Sep 16, 2026

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President Donald Trump said he still had confidence in Federal Reserve Chairman Kevin Warsh and criticized what he said was a “hostile” board even after the central bank unanimously defied his calls to lower borrowing costs.

“I do, I mean I’m relying on Kevin,” Trump told reporters about his hand-picked Fed chief, speaking Wednesday in North Carolina ahead of a campaign event.

His comments came hours after the Federal Open Market Committee voted to raise rates by a quarter percentage point, increasing the benchmark federal funds rate to a range of 3.75% to 4%.

Trump told reporters Wednesday that he had spoken to Warsh, though he did not say when that conversation took place. The president said he “didn’t try to convince him,” adding “you might as well vote with the board because it’s not going to matter.”

“I said do what you want,” Trump said. “It doesn’t matter because he doesn’t have the votes,” he continued. “No matter how good a job, he’s got a hostile board.”

Despite Trump’s remarks blaming what he sees as a “very political” board for the rise, the vote to increase rates was unanimous, with all twelve in favor of the move.

Trump’s comments suggest he is willing for now to give his hand-picked chairman leeway, even as he increases pressure on the central bank to lower borrowing costs. That creates a complicated dynamic for Warsh to navigate going forward, despite Trump asserting at his swearing-in ceremony he wants the chairman to be “totally independent.”

In a social media post earlier Wednesday, Trump said that U.S. rates “should be 1%, or less” because “Our Country is BOOMING with new Investment” and has “the Best Credit in the World.”

“LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!” he posted.

Driving rates down to Trump’s desired level would require the central bank to make a significant reduction, a move that typically only accompanies a severe economic crisis.

Trump in his post continued to argue that interest rates have put the U.S. at a competitive disadvantage to other world economies, tying it to the nation’s trade deficit by saying, “We are ‘carrying’ almost every country in the World, and that cannot go on any longer.”

In the past, the president has threatened to cut off trade with partners that have a trade surplus, unless the Fed lowered rates. It’s unclear how following through on that threat would lead to lower borrowing costs for Americans.

Wednesday’s rate hike, the first since 2023, came as policymakers lost confidence inflation would cool on its own. The Fed was expected to lift interest rates after recent data showed U.S. consumer prices rising higher than expected in August. Higher energy prices from the U.S. war with Iran — a conflict now in its seventh month — as well as Trump’s tariff policies have clouded the picture for the Fed’s inflation targets.

Officials in their post-meeting statement characterized inflation as elevated but also described the economy in positive terms, with strong productivity growth and capital investment as well as job gains that were keeping pace with the workforce.

Warsh in his press conference pointed to geopolitical risks as contributing to inflation. “There is no hiding from hot spots around the world, and our judgment about what is the most likely, or least likely, of the geopolitical situation has changed,” he said.

Warsh has vowed to protect the Fed’s independence even as he faced mounting pressure from a president frustrated by a soured midterm political climate for his Republican Party. Voters give Trump poor marks on the war in Iran and the economy, with high prices for healthcare, housing, energy and groceries a top issue for November’s election. Lower borrowing costs could help Trump and GOP lawmakers argue that an economic boost is on the way and help limit the electoral damage.

Trump dealt harshly with Warsh’s predecessor, former Chair Jerome Powell, regularly lambasting him for not moving more aggressively to reduce rates. He’s also pressured the central bank in other ways, including trying to fire Governor Lisa Cook, a move that has been blocked so far by the Supreme Court.

(With assistance from Derek Wallbank.)