Renewed Trump-Fed Clash Could Weigh on U.S. Stocks, Motley Fool Says

A renewed clash between President Donald Trump and Federal Reserve Chair Kevin Warsh could put downward pressure on U.S. stocks if tensions escalate, The Motley Fool said.

The U.S. investment outlet reported on October 24 that Trump has recently begun voicing dissatisfaction with Warsh over the Fed's rate increase, arguing that a deeper conflict with the central bank could become a burden on equities.

The Fed raised its benchmark interest rate by 0.25 percentage point in September. Trump has publicly criticized the central bank's monetary policy, saying rates are too high. In a recent interview with Time, he said "the problem is that the Fed board is very hostile" and that while he does not blame Warsh, he would have voted against the board's decision if he were in Warsh's position.

The Motley Fool said persistently high U.S. inflation could spur further Fed rate increases. It cited the Trump administration's tariff policy and rising energy prices linked to the war with Iran as key drivers of inflation.

According to CME FedWatch, markets are pricing in a 64% chance that the Fed will raise its benchmark rate by at least another 0.75 percentage point by September 2027.

The Motley Fool said a public confrontation between Trump and the Fed chair could erupt again, adding that political pressure on the Fed risks undermining the central bank's credibility.

It also said that if further rate increases lift borrowing costs, investment in AI data centers — a key driver of gains in U.S. equities — could slow. In that case, major indexes including the Dow Jones Industrial Average, the S&P 500 and the Nasdaq could face downward pressure.