On September 16, 2026, the Federal Reserve raised interest rates for the first time since 2023. “The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent,” its statement said, adding that “Inflation remains elevated.” The vote was 12-0 under Chair Kevin Warsh, whom Trump appointed. Warsh said, “The plain fact is that inflation is too high and has been for too long.” Asked about the president, he said, “I've got nothing for you on a discussion with the president.”
Trump had pressured the Fed in advance. On September 4 he posted, “LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” and wrote that the Fed board “must get smart - BE PATRIOTS for a change.” About two and a half hours after the decision, he posted: “Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR,” ending, “LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!”
Speaking to reporters in North Carolina that evening, Trump said he still had confidence in Warsh but attacked the rest of the committee: “The board is very hostile. They're very political. They're doing the wrong thing. They're a bunch of politicians.” He said he had talked with Warsh before the vote and, according to AP, told him, “You might as well vote with the board because it's not going to matter.” Outlets transcribed that remark differently, and no transcript has been released. Asked whether he should be able to control Warsh, Trump said, “No, I want him to be independent.”
White House senior deputy press secretary Kush Desai called it a “rather unfortunate decision” that was “not, from the administration's point of view, backed by a particularly compelling economic case.” Trade adviser Peter Navarro called the hike “a stiletto in the heart of Main Street” and said, “I think they wanna hurt Trump by hurting America.” Warsh, asked about the pressure, said, “Part of the independence of the Federal Reserve is that we stay in our lane.”
The episode follows the Justice Department's dropped criminal probe of former Chair Jerome Powell, which cleared the way for Warsh's confirmation (see DOJ Drops Criminal Probe of Fed Chair Powell, Clearing the Path to Install Warsh Three Days After His Senate Testimony).