Trump attacks Fed board over high interest rates, praises Kevin Warsh
President Donald Trump on Wednesday accused the Federal Reserve’s board of governors of keeping interest rates high for political reasons, while sparing newly installed Fed Chairman Kevin Warsh from his criticism.
“The problem is he has a board, and it’s a political board,” Trump told reporters. “People put in by Obama, Biden, and me, and there are quite a few members still left, as you understand, and so they vote to raise interest rates. I don’t know if they’re doing it because they think they’re doing a good thing or because they like the politics of it.” Trump said Warsh, who took over as chairman in May, is doing a “great job.”
According to CNBC, the Fed’s last benchmark rate increase came more than three years ago. The FOMC delivered three rate cuts in the second half of 2025, after an identical number of reductions the previous year, yet Trump has made clear that this cadence falls well short of what he wants. Trump has contended that cheaper borrowing is essential both to keep the expansion on track and to ease the carrying cost on the country’s nearly $40 trillion in debt.
Trump also took issue with the relationship between positive economic data and interest rates. “Years ago, 25 years ago, when the country announced good numbers, interest rates went down because we had a stronger country,” he said. “Now, when we announce good numbers, the better they are, the worse it is for interest rates.”
The president’s comments came the same day the FOMC released minutes from its July meeting. Those minutes showed that “many” officials believed higher rates would be necessary unless inflation showed more progress. Second-quarter GDP came in at an annualized 1.5%, a step down from the 2.1% growth rate posted in the first three months of the year.
The July meeting was the FOMC’s most divided policy vote in years. The committee voted 9-3 to hold rates in a range of 3.5% to 3.75%, with three regional bank presidents — Beth M. Hammack of the Cleveland Fed, Neel Kashkari of the Minneapolis Fed, and Lorie K. Logan of the Dallas Fed — each dissenting in favor of a quarter-point increase. No members of the Board of Governors joined the dissent. Officials described inflation as elevated and their outlook for it as “highly uncertain.”
Former Fed Chairman Jerome Powell, whom Trump repeatedly pressured to cut rates before Warsh took over, remains on the board as a governor. Trump also held up Switzerland as an example of a country paying far lower rates than the U.S., saying he has “the absolute right to cut off all business” with nations in that position. He added that he does not believe the U.S. faces a bond market problem despite what he considers unfairly high rates.