President Donald Trump is flashing ominous signs that he is gearing up to turn on the Federal Reserve chair he handpicked, an economic analyst warned.
In a Saturday analysis for The Guardian, economics writer Eduardo Porter credited the Federal Reserve under Chairman Kevin Warsh with having "acquitted itself well" through a week of pressure from the White House, but warned "the signs are ominous" that Trump will "turn on Warsh in the way he did on his predecessor, Jerome 'numbskull' Powell."
Porter tracked the widening rift between the president and Kevin Warsh since Trump elevated him to the job. He noted that Warsh presided this week over a unanimous decision to raise interest rates for the first time in three years, a direct rebuff to a president who has spent months demanding cuts.
"Warsh's resolve - raising rates just a few weeks before elections that will determine whether Republicans retain control of Congress - appeared even more resolute in the face of a veiled threat from White House economic adviser Kevin Hassett," Porter wrote, referring to Hassett's saying on Fox that "if you want an independent Fed, then one thing the Fed does is it stays out of the way of elections."
Trump did not take the rate hike quietly, though, Porter noted. Trump "went ballistic" on social media and insisted borrowing costs should sit at 1 percent or lower because the country carries the best credit in the world. Trump also demanded that rates be slashed fast.
The outburst came despite inflation running above the Federal Reserve's target for years and a federal deficit on pace to top 2 trillion dollars, Porter noted.
Porter also saw signs in the gap between Warsh's restraint and the rest of the administration, from sweeping tariffs to a push by Treasury Secretary Scott Bessent to force long-term rates down even as the Fed lifts them. "More clown cars are likely on the way," Porter warned.
He closed on a cautionary note, writing that anyone counting on the Fed chair to steady the economy should know that "holding one's breath may be a bad idea."