Fed Chair Kevin Warsh brushed off President Donald Trump's renewed criticism of the central bank after the Federal Open Market Committee raised interest rates on Sept. 16, calling the move the right one to deliver price stability. Trump has pushed for lower rates since early 2025, while Warsh signaled more hikes could follow.
Fed Chair Kevin Warsh gave a blunt, nine-word answer when asked what he'd tell President Trump about the Federal Reserve's latest move. Following the Federal Open Market Committee's Sept. 16 decision, an ABC News reporter asked Warsh for his message to the president, who has repeatedly called for lower rates. According to The Motley Fool: "The decision we made today was the right decision."
FOMC raises rates despite Trump's objections
Warsh and 11 other FOMC members voted unanimously, 12-0, to raise the federal funds target rate by 25 basis points to 3.75%-4.00% on Sept. 16, marking the fourth rate-hiking cycle of the 21st century. Warsh was sworn in as the 17th head of the Fed on May 22.
President Trump has criticized the FOMC's handling of interest rates since the start of his second term. He has argued since January 2025 that rates should sit at or below 1%. Lower borrowing costs, in his view, would spur hiring and spending tied to the artificial intelligence infrastructure build-out and ease the cost of servicing federal debt, which surpassed $40 trillion in August.
Warsh signals more hikes may follow
Warsh described the September move as removing a dose of accommodation, language that suggests the increase isn't a one-off. The FOMC's unanimous vote indicates the committee sees persistent inflation pressure as serious enough to justify further tightening ahead.
Trump has previously said he told Warsh to vote with the board on the rate hike because the outcome wasn't going to matter, while maintaining he still has confidence in the Fed chair. Warsh's response leaves no ambiguity about where the central bank stands on its mandate from Congress to keep prices stable.
Source: The Motley Fool
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