Federal Reserve raises interest rates to curb inflation, despite pressure from Trump

The Federal Reserve raised interest rates by a quarter of a point Wednesday, marking the first such increase in three years. The move came in the face of discouraging data on inflation and consumer prices that forced the hand of Fed Chairman Kevin Warsh just four months after Donald Trump appointed him.

The developments were not a foregone conclusion. On the one hand, the economic data suggested that inflation was proving stubborn, making higher interest rates a necessity. In fact, MS NOW highlighted a Duke University survey, published earlier this week, which found a nearly unanimous consensus among former Fed officials that a rate hike was necessary.

On the other hand, Donald Trump and his White House team — who were responsible for choosing Warsh in the first place — have launched a heavy-handed lobbying campaign, trying to convince the Fed chair to leave the status quo intact, despite economic conditions.