President Donald Trump, in an oft-confrontational interview with NBC News\u2019 \u201cMeet the Press,\u201d blasted the growing consensus from Main Street to Wall Street that the Federal Reserve will begin to raise the benchmark federal funds rate later this year to offset risks to the inflation side of the Fed\u2019s mandate.<\/p>\n
Some Fed officials and many analysts are forecasting that the policy-making Federal Open Market Committee will raise interest rates as soon as the end of the year if not sooner due to increasing price pressures.<\/p>\n
Trump said while he wants Warsh \u201cto do whatever he wants,\u201d he also added that \u201cThere\u2019s no reason to raise interest rates.<\/strong>\u201d<\/p>\n Trump\u2019s comments came the same day as another major bank — Goldman Sachs — sent a note to clients backing off a rate cut later this year and stock indices suffered the worst drop in months after the May jobs report was a markedly more robust read than expected and the jobless rate held steady at 4.3%.<\/p>\n The strong jobs numbers also prompted a June 5 selloff in Treasuries and caused traders to pencil in a quarter-point increase<\/strong> in the Fed\u2019s key rate by year-end. \u00a0\u00a0<\/p>\n According to Collin Martin at the Schwab Center for Financial Research, his base case is for an \u201cextended pause\u201d at the central bank amid a lot of uncertainty.\u00a0<\/p>\n \u201cIf we look at it strictly in a vacuum, the case can be made for a hike right now,<\/strong>\u201d Martin, the head of fixed income research and strategy at the Schwab Center, said June 8 on Bloomberg Television.<\/p>\n \u00a0\u201cWe have inflation that\u2019s been high for five years and counting and moving in the wrong direction,\u201d Martin said.<\/p>\n The Fed\u2019s own target rate for annual inflation is 2%.<\/p>\n Anna Moneymaker / Getty Images<\/p>\n<\/figcaption><\/figure>\n The president isn\u2019t flexing into the hawkish fever picking up steam.<\/p>\n \u201cKevin is fantastic, and I \u2026 don\u2019t want to have a big influence on him,\u2019\u2019 Trump said. \u201cBut we had a great report. We\u2019re doing great, and it\u2019s unfair that whenever you do great, they want to raise interest rates.\u201d\u00a0 \u00a0 \u00a0\u00a0<\/p>\n The president\u2019s comments come just days before the June 16-17 FOMC meeting<\/strong> where divisive debates are expected to mark Warsh\u2019s debut as Chair.<\/p>\n \u201cNowadays when you have good reports, the market goes down because they think they\u2019re going to raise interest rates,\u201d Trump said.\u00a0<\/p>\n The Fed\u2019s dual mandate from Congress requires maximum employment and stable prices.<\/p>\n Warsh took over the Chair role on May 22 \u2014 the same day the Dow closed at another record high.\u00a0<\/p>\n But bond yields continue to rattle upwards and inflation forecasts are fluctuating due to surging oil prices and the dragging Iran War peace process.\u00a0<\/p>\n This is definitely not what Trump was expecting when he nominated Warsh in January after a months-long campaign to find whom the president defined as a \u201cloyal\u201d Fed Chair who would follow his monetary policy agenda which included slashing the benchmark federal funds rate to 1% or less.<\/p>\n Related: Fed drops rate-cut bombshell<\/strong><\/p>\n Warsh, a former Fed governor, has long been critical of the central bank and had called for lower interest rates as well as a smaller balance sheet and reduced communications strategy.<\/p>\n But he silenced some critics concerned about Fed independence from political and partisan interference by saying he had not discussed interest rates with Trump during the Chair interview process or afterwards.\u00a0\u00a0<\/p>\n The FOMC, in a decisive 8-4 vote on April 29<\/strong>, held the benchmark federal funds rate at 3.50% to 3.75%.<\/p>\n It was the first time in more than 30 years the FOMC vote reflected four dissents.<\/p>\n It was the FOMC\u2019s third pause after cutting rates by 75 basis points during its last three meetings of 2025 to boost a weakening labor market.<\/p>\n Three of those dissents were by regional bank presidents — Cleveland Fed President Beth M. Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie K. Logan — because the post-meeting\u2019s statement did not have language that supported \u201cinclusion of an easing bias in the statement at this time.\u201d\u00a0<\/p>\n While the Fed chair sits on the 12-person FOMC, policy decisions come from the majority votes of the committee.\u00a0<\/strong><\/p>\n The minutes of the April FOMC meeting, released May 20, showed an even more hawkish shift from policy markers with increasing interest in possible easing due to\u00a0 inflation risk.<\/p>\n Martin said an initial step later this month could be for the FOMC to shift its so-called bias to neutral from easing. But he added that a prolonged Iran War could push the committee still further to hike rates.<\/p>\n \u201cIf we continue to see the conflict go on, which is inflationary, and if we see this labor market strength continue, I think that shift to neutral could become a shift to hawkish,\u201d he said. \u201cBut I wouldn\u2019t expect that next week.\u201d<\/p>\n More on the Federal Reserve:<\/p>\n Martin added he wouldn\u2019t anticipate a \u201cfull-fledged hiking cycle.<\/strong> I think we\u2019re looking at one or two.\u201d<\/p>\n When asked during the NBC interview whether he would be upset if the Fed increased its rate, Trump deflected. He praised Warsh, saying he has \u201ca lot of respect for him,\u201d before arguing again for lower rates.<\/p>\n \u201cIf we do what I\u2019m saying, this will be a beautiful, well-oiled machine like you\u2019ve never seen before,\u201d Trump said.<\/p>\n Even economists who spent last year urging the Fed to cut are moving in a more hawkish direction, The Wall Street Journal reported June 5.<\/p>\n \u201cThe U.S. labor market has kicked into a higher gear,\u201d said Neil Dutta of Renaissance Macro Research in a June 5 note to clients.\u00a0<\/p>\n The Fed could move at its July meeting to signal the possibility that its next move will be a hike, Dutta said.\u00a0<\/p>\n And if the Fed hikes interest rates, Dutta said it won\u2019t make just one move.<\/p>\n The CME Group FedWatch Tool shows a near 100% probability that the FOMC will hold rates steady this month roughly an 85% chance it will do the same at its July meeting. <\/strong><\/p>\n Related: Goldman Sachs sends blunt message on Fed interest rate cuts<\/strong><\/p>\n #White #House #sends #blunt #message #Warsh #Fed #rate #fears #rise<\/p>\n","protected":false},"excerpt":{"rendered":" The White House is rapidly pushing forward with its longtime campaign for drastically lower interest rates to ensure Fed Chair Kevin Warsh gets the message as his first policymaking meeting… <\/p>\n","protected":false},"author":1,"featured_media":6429,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[1896,618,674,1338,267,126,70,1538,1659,1337],"class_list":["post-6428","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-blunt","tag-fears","tag-fed","tag-house","tag-message","tag-rate","tag-rise","tag-sends","tag-warsh","tag-white"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/6428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6428"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/6428\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/6429"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Uncertainity mounts over Fed interest-rate bets<\/h2>\n
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White House pushes for lower interest rates<\/strong><\/h2>\n
![](\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMDcwNjYw\/thestreet_graph_federal-reserve-effective-federal-funds-rate.jpg?profile=rss\")
<\/p>\n<\/figure>\nFed\u2019s mandate requires a tricky balance<\/strong><\/h3>\n
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Rate-cut bets for this year are off the table<\/strong><\/h2>\n
April FOMC meeting held interest rates steady<\/strong><\/h2>\n
Fed April FOMC minutes show strong hawkish rate shift<\/strong><\/h2>\n
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Iran War key to future Fed rate cuts<\/strong><\/h2>\n
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Hawkish trend picks up speed over interest-rate bet<\/strong>s<\/h2>\n