Trump backs Warsh, blames Fed board for rate hike

President Donald Trump blamed the Federal Reserve board for raising interest rates against his wishes, but the board he faulted includes three of his own appointees, all of whom voted for the increase.

Trump said he still backs Fed Chairman Kevin Warsh, whom he appointed, after the central bank raised rates despite his demands for cuts. He turned his criticism instead on the other members of the board.

"I do. I mean, I'm relying on Kevin, but he's got a very tough board," Trump told reporters Wednesday night in North Carolina, where he had traveled for a campaign rally. "He's got a board that was put there by a lot of other people. And the interest rates are too high."

The Fed said it raised rates to bring down inflation that "remains elevated," pledging that the move would support a "timelier return" to its 2% target. The federal government's interest costs have climbed as higher rates and a growing debt load raise the cost of borrowing and refinancing, with interest expense topping $1 trillion during fiscal 2026, according to Treasury Department figures.

Trump renewed the demand on Thursday, writing on his social media platform that U.S. interest rates "should be 1%, or less" and urging the Fed to "LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!"

The Fed on Wednesday set its benchmark rate at a range of 3.75% to 4%, about four times the level Trump is demanding. Rates of 1% or less have been unusual in recent decades, with the Fed holding its target at 1% in 2003 and 2004 and near zero during the 2008 financial crisis and the COVID-19 pandemic.

Of the seven-member board, three governors were appointed by Trump: Warsh, Vice Chair for Supervision Michelle Bowman and Christopher Waller. A fourth, Jerome Powell, was first appointed to the board by President Barack Obama and elevated to chairman by Trump in his first term; Powell now serves as a governor. The three others, Vice Chair Philip Jefferson, Michael Barr and Lisa Cook, were appointed by President Joe Biden.

All seven governors also sit on the Federal Open Market Committee, the 12-member panel that sets rates, which voted unanimously for Wednesday's increase.

Trump spent much of his second term pressuring the Fed to cut rates, repeatedly attacking Powell by name before Warsh replaced him as chairman in May. His administration also explored removing Powell, and the Justice Department opened, then closed, a criminal investigation into the Fed's building renovations before Warsh took over as chairman.

U.S. stocks rebounded Thursday as Treasury yields eased and the 10-year note slipped back below 5%, recovering ground lost after Wednesday's rate hike.