On 16/9, following a two-day policy meeting, the Federal Reserve (Fed) announced it had raised its benchmark interest rate by 25 basis points (0.25%) to 3.75-4%. This marked the first rate hike since 7/2023.

While campaigning in North Carolina, US President Donald Trump was asked by reporters if he still trusted Fed Chair Kevin Warsh following the decision. "Yes, I rely on Kevin. But you know, he has a difficult council to work with. Its members were appointed by others," Trump explained.

The Fed's rate adjustment decision on 16/9 came less than two months before the US midterm elections. This election will determine if Trump's Republican party maintains control of Congress for the final two years of his term. The Republican party faces challenges as voters are upset over gas prices rising over 30% compared to last year and continuously increasing mortgage rates this year.

"This council is hostile. They are very political and making mistakes. They are raising interest rates to disadvantage Trump as much as possible," the US president complained about Fed officials.

He also continued to call for the Fed to cut interest rates, even as the agency is predicted to continue raising them. "We are carrying the weight of almost every country in the world, and this cannot last. Cut interest rates quickly," he wrote on the social media platform Truth Social. The US president wants an additional "1% or close to it" reduction.

The US president said he told Warsh: "Just vote with the council. It's not a problem." This statement could undermine the commitment by Warsh and Trump himself that the Fed operates independently, free from White House pressure. Warsh was Trump's nominee, appointed as the US president has continuously urged the Fed to cut interest rates since early last year.

He also reiterated his threat to halt trade with partners where the US has a trade deficit if the Fed does not cut interest rates, a warning he issued two weeks prior.

*Ha Thu (Reuters, CNBC)*