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Trump shields Warsh; White House doubts rate hike
The US Federal Reserve announced a half-percentage-point interest rate hike for the first time in three years, aimed at combating the persistent high inflation that still exceeds the 2% target. The decision was made unanimously by the committee to support a faster return of inflation to the targeted level, although it was criticized by President Donald Trump, who accused it of political motives and called for a rapid rate reduction. Fed Chair Kevin Warsh believes that inflation remains high and requires austerity measures to cool the economy, despite the fact that this has led to a decline in Wall Street stocks, a strengthening of the dollar, and bond yields rising above 5%. Economic forecasts predict that interest rates will continue to be raised until the end of this year, with no cuts expected before 2028, in order to enhance price stability and reduce demand for goods and services—despite political criticism claiming that the decision impacts Trump’s administration performance and violates the central bank’s independence.
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