Trump Rips Fed Rate Hike But Gives Kevin Warsh A Pass

President Donald Trump ripped the Federal Reserve after it hiked its benchmark interest rate for the first time in more than three years—but Trump spared Fed Chairman Kevin Warsh. 

“Interest rates in the United States should be 1%, or less, because we are the best credit in the world—by far,” Trump wrote on Truth Social on Wednesday. “Lower the interest rates for the United States of America, and fast!” 

The Federal Reserve voted unanimously to raise its target rate by 25 basis points, lifting it to a range of 3.75%-4.0%. The Fed said inflation remained elevated and that the increase would support a faster return to its 2% target.

“The plain fact is that inflation is too high and had been for too long,” Warsh said after the vote.

Before boarding Air Force One on Wednesday, Trump said he and Warsh remained aligned despite the chairman’s vote to raise rates.

“I’m aligned with Kevin,” he said. “He’s got a very tough board…The board is hostile and political.”

Trump said he had told Warsh to vote with the rest of the board because his opposition would not have changed the outcome.

“I talked to Kevin, and I said, you might as well vote with the Board because it’s not gonna matter,” Trump said.

Trump continues to be complimentary of Warsh, whom he described as “central casting” when announcing his nomination. At the time, Trump said Warsh could become the best chairman in Federal Reserve history.

“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the great Fed Chairmen, maybe the best,” Trump said. “On top of everything else, he is ‘central casting,’ and he will never let you down.”

Trump was similarly complimentary when he nominated Jerome Powell to lead the Fed in 2017, but he later attacked Powell over interest rates. Trump called Powell “a real dummy” and a “stupid man” and argued that he was “costing our country a fortune.”

His rhetoric was dramatically different when he first appointed Powell.

Powell is “strong, he’s committed, he’s smart,” Trump said at the time. “And if he is confirmed by the Senate, Jay will put his considerable talents and experience to work leading our Nation’s independent central bank.”

While Trump’s attitude toward Warsh didn’t change Wednesday, Sen. Elizabeth Warren (D-MA) appeared to soften her tone toward the Fed chairman.

During Warsh’s confirmation process, Warren called him a “sock puppet” for Trump, arguing that Warsh would not be willing to stand up to the president and would instead do his bidding.

On Wednesday, however, Warsh took an action that Warren said signaled to Wall Street that “he is committed to bringing inflation under control.” But Warren stopped well short of fully embracing the chairman.

“It takes a long time, more than one action, to rebuild a reputation,” she said.

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