The Fed Raises Rates for the First Time Since 2023 as Trump's Own Chair Says "The Plain Fact Is That Inflation Is Too High and Has Been for Too Long" — Trump Answers That Rates "Should Be 1%, or Less," Calls the Board "a Bunch of Politicians," and Says He Told Kevin Warsh "You Might as Well Vote With the Board," While Elizabeth Warren Calls Warsh Trump's "Sock Puppet"
On Sept. 16, 2026, the Federal Reserve's Federal Open Market Committee voted 12-0 to raise its benchmark rate by a quarter point, to a range of 3.75% to 4%. It was the Fed's first increase since July 2023 and the first under Chair Kevin Warsh, whom President Trump picked and the Senate confirmed in May. Updated projections showed 16 of 18 officials expect another hike before the end of the year. At his press conference, Warsh said inflation, 3.4% as of August, was "too high" and pointed to a strengthening economy and "hot spots around the world." Renewed U.S.-Iran fighting has pushed gas prices up. The hike came 12 days after Trump threatened to "stop trading" with deficit countries unless the Fed cut rates. Trump wrote on Truth Social that rates "should be 1%, or less," called the board "very political," and told reporters he had said to Warsh beforehand, "you might as well vote with the board because it's not going to matter." Asked about that conversation, Warsh said, "I've got nothing for you on a discussion with the president." Trump said he still has confidence in Warsh. A day before the decision, National Economic Council Director Kevin Hassett had said the White House would "respect the process." Democrats blamed Trump's tariffs and the Iran war for the price increases behind the hike.
“It’s a monumental mistake. … When the Fed raises rates on top of an energy price shock, it runs the very real risk of an overreaction in driving the economy down into a recession or worse. … It is inexplicable that the Fed and Kevin Warsh do not understand that history. [What the Fed is doing is] ahistorical and bad economics.”