Trump Demands 1% Rates After Warsh Raises to 3.75%-4%

President Donald Trump demanded on Wednesday that the Federal Reserve cut interest rates to 1% or lower after Chair Kevin Warsh raised the federal funds rate to 3.75%–4% in a unanimous vote by the Federal Open Market Committee. He posted the demand on Truth Social and warned he could restrict trade with countries running large surpluses if the Fed does not ease policy.

The FOMC’s increase was the Fed’s first since 2023. In updated projections, 16 of 18 officials now expect at least one more rate increase before the end of the year, a change from the committee’s July outlook. The committee removed language that had partly attributed inflation to supply shocks and said the higher policy rate would help bring inflation back to its 2% target more quickly.

On Truth Social he wrote in all caps: “LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!” He argued the United States deserves near-zero borrowing costs because of its creditworthiness and repeated a claim that cutting trade with surplus countries could add at least $1.5 trillion a year to federal revenue. Independent reviewers have called the $1.5 trillion figure overstated.

A White House spokesman, Kush Desai, reiterated that Trump still “absolutely” believes in the Fed’s independence while the president continues to press the central bank publicly.

Markets reacted to the decision. Bitcoin rose in the minutes after the announcement before finishing the day lower, and gold briefly spiked then gave back gains. Traders are watching for signals at Chair Warsh’s next press conference.

Kevin Warsh succeeded Jerome Powell as Fed chair earlier this year. The Fed’s unanimous vote and the shift in officials’ projections reflect a tighter policy stance than earlier in the year.