President Donald Trump is on a "collision course" with his hand-picked Federal Reserve chairman after the body gave the president a startling rebuke on Wednesday, according to a new report.
The Federal Reserve voted to raise interest rates for the first time since 2023 on Wednesday, citing persistent inflation and global impacts from the war in Iran. That puts Chairman Kevin Warsh on a "collision course" with Trump, the Guardian noted, because Trump said in a Truth Social post earlier in the day that the U.S. should have "the lowest interest rates in the world." The president also threatened to cut off trade with other countries if the Federal Reserve didn't lower interest rates.
“Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal,” the Federal Open Market Committee said in a statement.
Warsh and Trump appear even more likely to clash in the near future as officials estimate at least one more rate hike is coming before the end of the year, according to the report. That could push the central bank's interest rates up to 4.5%, increasing borrowing costs.
"Higher prices have painted a grim economic outlook as voters prepare to head to the polls in November. Recent data and surveys have shown heightened inflation has wiped out wage gains for Americans and dampened consumer outlook. In August, hourly earnings for employees decreased by 0.1% year-over-year after accounting for inflation and fell by 0.3% from the month prior. Consumer sentiment has also rapidly declined, according to a monthly survey from the University of Michigan, while expectations for more inflation have increased," the Guardian reported.