Overview
- President Donald Trump urged the Federal Reserve to lower interest rates and praised Fed chair pick Kevin Warsh in comments made on Monday, saying the United States should have the lowest borrowing costs in the world.
- Markets expect the Fed is likely to hold its policy rate but place about a one-in-three chance on a 25 basis point hike at the upcoming FOMC decision, according to the CME Group’s FedWatch tool.
- Federal Reserve officials remain split over policy as some, including Dallas Fed President Lorie Logan, have publicly called for rates to be modestly higher to counter persistent inflation.
- The Fed’s target overnight rate is currently 3.50%–3.75%, a level set after cuts in the second half of 2025 that leaves U.S. borrowing costs higher than those in the euro area and Japan.
- U.S. diplomats briefly walked out of a United Nations session after France criticized the U.S. human rights record, an episode that underscores growing diplomatic friction that could complicate the administration’s broader foreign policy agenda.