Trump Says He Trusts Fed Chair Despite Back-to-Back Rate Holds, Blames the Board

[Financial News] U.S. President Donald Trump, who had pressured the Federal Reserve System (FRS) to cut its benchmark interest rate and even replaced its chair, voiced frustration on the 29th local time over the Fed's decision to keep rates unchanged. He said the Fed chair he newly appointed is capable, but that the existing Board of Governors of the Federal Reserve System is the problem.
According to Western media outlets, including The Guardian, Trump met reporters in the Oval Office at The White House and spoke about Fed Chair Kevin Warsh. Asked whether he was disappointed by Warsh's decision to hold rates steady, Trump replied, "He is fantastic, smart and wise. I knew he wanted to lower rates," adding, "But he has a board." Trump said, "It is a very political board, and they want to raise rates." He also emphasized, "But we are moving through the rate issue. We have attracted investment at the highest level ever."
Earlier that day, the Federal Open Market Committee (FOMC) ended its regular meeting and kept the benchmark rate in the 3.5% to 3.75% range. It was the fifth straight hold and the second since Warsh took office in May. Nine FOMC members voted to keep rates unchanged, while three argued instead for a 0.25 percentage point increase.
At a press conference on the 29th, Warsh pushed back against calls to raise rates to curb inflation, saying, "There is no flexible implicit inflation target in this committee. There is only one target, and that is 2%." He added, "None of my FOMC colleagues are confused about that," signaling skepticism toward rate adjustments aimed at price stability.
During his first term, Trump also pressured former Fed Chair Jerome Powell to cut rates in order to stimulate the economy and reduce government interest costs. After beginning his second term last year, he repeated the same demand, and earlier this year he even sought criminal charges against Powell for refusing to listen.
In an interview on May 19, Trump was asked whether Warsh could lower rates if he became Fed chair. He said, "I will let him do what he wants." After the FOMC held rates steady on the 17th of last month, Trump said of Warsh's move in another interview, "That's fine. I don't care." Trump, who had previously lashed out at Powell, said of the possibility of a rate hike, "It could happen," and added, "There is a very good person at the Fed now. I will follow what he wants."
[email protected] Park Jong-won Reporter