Trump Urges Warsh to Cut Rates to 1% as Markets Price In 2026 Hike
Updated
Updated · Financial Times · Jun 7
Trump Urges Warsh to Cut Rates to 1% as Markets Price In 2026 Hike
3 articles · Updated · Financial Times · Jun 7
Summary
1% or lower is the benchmark rate Trump said Kevin Warsh should target, intensifying pressure before the new Fed chair’s first policy meeting on June 16-17.
172,000 May jobs added and signs the labor market has stabilized pushed investors to bet the Fed may need to raise rates by year-end instead of cut.
3.5%-3.75% is the current policy range, but inflation has climbed to 3.8% after Iran’s closure of the Strait of Hormuz drove fuel prices higher; economists see 4.2% in May data due Wednesday.
Fed officials are already signaling caution: Cleveland Fed President Beth Hammack said high inflation is now the bigger concern, while Treasury Secretary Scott Bessent said waiting for clarity on the war’s price effects is reasonable.
The clash sets up Warsh’s debut meeting as a test of Fed independence after Trump repeatedly attacked predecessor Jay Powell for not cutting rates fast enough.