Trump Avoids Direct Clash With Warsh, but Another October Rate Increase Could Deepen Rift

Pressure set to build ahead of the November election

Warsh says each side must stay in its own lane

President Donald Trump blasted the Federal Reserve after it raised interest rates.

Minutes after Fed Chair Kevin Warsh finished his Sept. 16 press conference, Trump wrote on Truth Social that U.S. interest rates should be below 1% because the country has by far the best credit in the world. He added that the U.S. is supporting almost every other country and that the situation can no longer continue. “Lower U.S. interest rates, and do it fast!” he wrote. White House spokesman Kush Desai also attacked the Fed in an interview with Fox News, saying the latest rate increase was not based on a particularly compelling rationale.

Trump, however, did not directly criticize Warsh. Speaking to reporters, he said he trusts “Kevin,” but that the Fed chair has a very difficult board. He also said he spoke with Warsh before the rate decision and told him it would be better to vote with the board because the outcome would not change anyway.

Warsh’s conversation with Trump before the Federal Open Market Committee meeting could fuel concerns about central bank independence. Asked at the press conference whether he had spoken with the president, Warsh said he had nothing to say about his discussions with Trump. He added that one of the core principles of Fed independence is that each side protects its own domain.

Warsh also said those responsible for trade and fiscal policy should remain in their own lanes so the Fed can stand here and judge issues fairly. The comment was widely interpreted as aimed at Treasury Secretary Scott Bessent, who has recently voiced public opposition to the rate increase.

Concerns about Fed independence are now turning to the October FOMC meeting. Ahead of the Nov. 3 midterm elections, Trump may try to prevent another rate increase in October. Pressure on Warsh also stands to intensify. On prediction market platform Kalshi, the odds that Trump will publicly criticize Warsh before year-end rose to 66% from 44% before the FOMC decision was announced.

Lee Sang-eun, Washington correspondent / Hwang Jung-soo, New York correspondent selee@hankyung.com