Trump Loses Interest Rate Battle... In First Confrontation with Warsh
Kevin Warsh leads the Federal Reserve to raise interest rates in his first confrontation with Trump.
Translated by Qiyas from النهار — Original source
Federal Reserve Chair Jerome Powell defied pressure from U.S. President Donald Trump to cut interest rates, leading the central bank to its first rate hike since 2023, less than four months after taking office. Powell signaled, thus far, his independence from the White House, having successfully rallied all twelve members of the Federal Open Market Committee behind the decision to raise rates by a quarter percentage point. Powell’s stance ran counter to Trump’s expectations, who had believed that appointing him as Fed chair would lead to rate cuts. The move also sent a clear message to markets that he is prepared to take further steps to curb inflation, even as the pivotal midterm elections approach. The decision bolstered the U.S. dollar by about 0.7% against a basket of major currencies, while the yield on two-year U.S. Treasury bonds rose to 4.74% before dipping slightly to 4.71%. Meanwhile, yields on 30-year bonds fell slightly, trading near 5.35%.
