Overview
- Speaking to reporters at the Irish Open, President Trump said the United States should have the world’s lowest interest rates and declined to predict whether the Federal Reserve would raise rates at its upcoming meeting.
- Government consumer-price data showed the largest uptick in underlying inflation in months, a move that has strengthened market and analyst expectations that the Fed could choose to raise rates.
- Kevin Hassett, director of the National Economic Council, said the administration will defend Fed chair Kevin Warsh’s independence while also confirming the president would be unhappy if policymakers raised rates.
- Markets and political strategists are watching closely because a rate increase would directly affect borrowing costs for households and businesses and could shape voter concerns about affordability ahead of the midterm elections.
- Warsh’s installation as Fed chair earlier this year changes the institutional backdrop, and officials’ mix of public support for his independence plus pressure for low rates highlights tensions between political aims and the Fed’s inflation mandate.