Trump Says U.S. Interest Rates Are Too High, Presses Fed Chair Warsh for Cuts

[Financial News] U.S. President Donald Trump said the country’s benchmark interest rate is too high and repeatedly urged Federal Reserve System (Fed) Chair Kevin Warsh to cut rates.
Speaking to reporters in the Oval Office at The White House in Washington on the 31st of last month local time, Trump said he had great respect for Warsh, but added, in reference to interest rates, that "he will do what he has to do."
Trump stressed, "Our current rates are too high," and added, "U.S. rates should be the lowest in the world." He went on to say, "Success and economic growth do not in themselves cause inflation. I do not want inflation either, but price increases happen for other reasons," and argued that "when the economy is doing well, there is no need to raise rates. In many cases, rates should actually be lowered."
The remarks are seen as a direct rebuttal to the hawkish, or tightening, stance Warsh recently signaled.
Earlier, in a speech at the Jackson Hole Economic Policy Symposium on the 28th of last month, Warsh said, "We need to be confident that underlying inflation is moving clearly and quickly enough toward the target," and added, "If not, there is still more work for the Fed to do." The comments suggested that the Fed could consider further rate hikes if inflation does not slow sufficiently.
After Warsh’s remarks, financial markets began to price in a higher chance that the Fed would raise rates at its regular Federal Open Market Committee (FOMC) meeting on the 15th and 16th. According to the CME FedWatch Tool, the probability of a September rate hike surged to about 60% immediately after Warsh’s speech.
As the possibility of tighter Fed policy came into view, Trump has stepped in personally to push hard for rate cuts, deepening the standoff with the central bank.

[email protected] Yoon Jae-jun Reporter