Trump Presses Warsh for Rate Cuts, Says US Borrowing Costs Should Be World’s Lowest

President Donald Trump again pressed Federal Reserve Chair Kevin Warsh to cut US interest rates, saying borrowing costs should be lower than those of any other country even after Warsh left open the possibility of another rate increase.

Reuters reported on August 31 that Trump told reporters in the Oval Office that “the United States should be paying much lower interest rates than any other country in the world.” Trump has repeatedly urged the Fed to lower rates, arguing that cheaper borrowing would support the economy and ease financing costs.

He also expressed confidence in Warsh. “I have great respect for him,” Trump said. On rate policy, Trump added that “he’ll do what he has to do.”

Trump’s remarks came after Warsh recently signaled the possibility of another rate increase while warning about inflation. Speaking at the Jackson Hole Economic Symposium in Wyoming on August 28, Warsh said the Fed “will have work to do” if it does not gain enough confidence that inflation is moving down toward its 2% target.

Markets read Warsh’s comments as hawkish. Traders took them to mean the Fed could raise rates at next month’s Federal Open Market Committee meeting if inflation does not slow enough.

The personal consumption expenditures price index, the Fed’s preferred inflation gauge, rose 3.7% in July from a year earlier, remaining above the central bank’s 2% target. The Fed is set to decide next month whether to adjust its benchmark interest rate at the FOMC meeting.

That has sharpened the contrast between Trump, who is demanding rate cuts ahead of the September FOMC meeting, and Warsh, who is emphasizing price stability. Warsh’s predecessor, former Chair Jerome Powell, also faced repeated pressure from Trump to lower rates during his tenure.