Overview
- In a June 7 interview, President Trump said he wants Fed Chair Kevin Warsh “to do whatever he wants” while also arguing there is no reason to raise interest rates and urging lower borrowing costs.
- The U.S. Labor Department’s May report showed employers added 172,000 jobs and upward revisions to prior months, and markets fell as traders priced in a higher chance of a Fed rate increase.
- The Federal Open Market Committee, not the Fed chair alone, sets interest rates, so any policy move would require agreement from the committee’s voting members.
- Rising oil and gasoline prices since the Iran war have kept inflation above target, a factor that Fed officials must weigh when deciding whether to raise rates.
- Mr. Trump’s public deference to Warsh contrasts with his past pressure on Jerome Powell and contributes to uncertainty about how political criticism could test the Fed’s independence and affect consumer borrowing costs.