Warsh wins credibility with rate hike

While President Trump has not publicly criticized Federal Reserve Chair Kevin Warsh for the central bank hiking interest rates on Wednesday, the move was still the opposite of what the president wanted .

“I’m relying on Kevin. But he’s got … a very tough board,” Trump told reporters in North Carolina on Wednesday, adding interest rates are “too high.”

The Federal Open Market Committee (FOMC), which includes Warsh, voted unanimously to raise its baseline interest rate by a quarter point, to a range of 3.75 percent to 4 percent .

While speaking to reporters after the decision, Warsh cited persistent inflation for the hike.

Here’s what to know about the decision and the president’s reaction.

Warsh wins credibility, Fed shows independence

In raising rates for the first time in three-plus years, the FOMC did what markets had overwhelmingly anticipated.

Warsh laid out why the Fed was hiking rates, noting inflation “remains elevated” above the central bank’s 2 percent target rate; annual inflation was 3.4 percent in August, as measured by the consumer price index.

“The plain fact is that inflation is too high and has been for too long,” the Fed chair told reporters.

He reiterated the importance of the Fed’s independence on Wednesday, saying the principle was a “two-way street.”

“I do think that Chair Warsh demonstrated with this action that the Fed is making monetary policy decisions based on the economics and independent from political considerations,” Loretta Mester, a former president of the Cleveland Fed, told The Hill. “And markets participants likely felt some reassurance.”

Going back to his first term, Trump has called on the FOMC to lower interest rates.

He specifically targeted former Fed Chair Jerome Powell, labeling him a “major loser” last year for voting to hold interest rates before backing three straight cuts to close out 2025.

But despite his continued preference for the Fed to slash rates, the president did not fault Warsh for Wednesday’s hike.

“He’s a good man, Kevin Warsh, but no matter how good a job [he does], he’s got a hostile board,” Trump told reporters in North Carolina, before stumping for GOP Senate candidate Michael Whatley.

The president also accused the other FOMC officials of raising rates for “political reasons” in an effort to damage him before the midterms.

Welcome to The Hill’s Business & Economy newsletter , I’m Julia Shapero — bringing you the latest on the intersection of Wall Street and Pennsylvania Avenue.

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Key business and economic news with implications this week and beyond:

Michigan Senate candidate Mike Rogers (R) on Thursday called on lawmakers to suspend taxes on gas sales as Americans face higher prices at the pump.

New Mexico gubernatorial candidate Deb Haaland (D) on Thursday backed a moratorium on the construction of data centers in her state, citing environmental and workforce-related concerns.

A federal judge has ordered Google to change its rules for auctioning online advertising on its platforms after finding last year that the search giant had an illegal monopoly over the technology connecting publishers and advertisers.

The number of people applying for unemployment benefits dropped sharply last week, another sign that layoffs remain rare and most Americans enjoy job security.

Branch out with more stories from the day:

Brit Hume: Inflation ‘just killing’ Trump administration

Political analyst Brit Hume on Wednesday evening said rising inflation and higher costs of living are hurting the Trump administration ahead of the midterms, as the Republican Party fights to maintain control in Congress.

Business and economic news we’ve flagged from other outlets:

Stocks surge as oil and bond yields retreat , recovering from Fed-induced sell-off ( CNBC )

Rising rates will make private equity’s bad year a lot worse ( Wall Street Journal )

Eight historical, architectural and preservationist organizations that are plaintiffs in a case against the Kennedy Center on Thursday called for the performing arts center’s leaders to either resign or appoint a receiver. Read more

A federal judge on Thursday declined Rep. Joyce Beatty’s (D-Ohio) request for an emergency hearing to review the Kennedy Center board’s latest vote to close the building for renovations. Read more

Opinions related to business and economic issues submitted to The Hill: