The US Federal Reserve (FED) made a unanimous decision to raise the key interest rate by 25 basis points, setting a new target range of 3.75% to 4.00%. This is the first increase in the price of loans since July 2023. The decision of the Federal Open Market Committee (FOMC) comes in response to persistently high inflation in the country, fueled by geopolitical tensions and rising energy prices, Deutsche Welle reports. The move surprised some in the market, as the White House had been pushing for a radically different monetary policy for months.
The reaction of US President Donald Trump followed just hours after the central bank's official statement. On his social network Truth Social, the head of state sharply criticized the tightening of monetary policy and categorically demanded a radical reduction in the cost of borrowing funds. According to a publication in Kursiv Media (kz.kursiv.media), Trump stated that interest rates in the United States should be immediately lowered to 1% or even lower. According to him, America has the best credit system in the world, and the economy should not be held back by high interest rates. [1, 2, 3]
Despite his serious disagreements with the institution's decision, the American leader was quick to cool speculation about a rift in relations with the bank's management. Speaking to reporters in North Carolina, Donald Trump declared that he continues to have confidence in his appointed Fed Chairman Kevin Warsh, whom he called a "good guy". However, the president stressed that Warsh faces a difficult and "hostile" leadership in the person of the remaining members of the governing council, the BBC (bbc.com) media network reports. [1, 2]
The new governor Kevin Warsh defended the decision to raise rates during his press conference, pointing out that the reality is obvious - inflation is too high and has remained at this level for too long. Economic analysts, quoted by Euronews (ru.euronews.com), note that this move by the central bank is aimed at ensuring price stability. The Fed's forecasts indicate that another rate hike is entirely possible by the end of the year.