Bessent says he has ‘great confidence’ in Warsh after Fed raises rates

Treasury Secretary Scott Bessent said Monday he has “great confidence” in Federal Reserve Chair Kevin Warsh after the central bank raised interest rates by a quarter point against the wishes of President Trump.

“I have great confidence in Chair Warsh,” Bessent told host Joe Kernen on CNBC’s “ Squawk Box .” “More importantly, the president has great confidence in him, and we are sure that he will do the right thing to balance the inflation mandate versus the growth mandate.”

The 12-member Federal Open Market Committee (FOMC), which Warsh sits on, voted unanimously last week to raise its benchmark interest rate to a range of 3.75 percent to 4 percent.

After the FOMC’s vote, Warsh cited persistent inflation — which has remained above the Fed’s 2 percent target rate for five-plus years — for the decision .

“The plain fact is that inflation is too high and has been for too long,” the Fed chair told reporters on Sept. 16. “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”

Bessent said Monday he was “not going to talk about” whether he agreed with the Fed’s decision to hike rates. But the Treasury secretary noted core inflation — which excludes volatile energy and food prices — has been “very quiescent.”

Core inflation, as measured by the consumer price index (CPI), has remained below 3 percent since last November and was 2.4 percent last month, according to data from the Bureau of Labor Statistics (BLS).

Overall inflation — including energy and food prices — hit a three-year peak of 4.2 percent in May and was 3.4 percent last month, per the BLS data.

After the Fed raised rates , Trump faulted the FOMC board and not Warsh , his handpicked successor to former Fed Chair Jerome Powell who still sits on the FOMC.

“I’m relying on Kevin, but he’s got a very tough board,” Trump told reporters in North Carolina last week.

The president, though, appointed four of the 12 members of the FOMC: Warsh; Powell; Michelle Bowman, the vice chair for supervision on the board of governors; and Christopher Waller, board member.

There may be another quarter-point rate hike this year, based on the FOMC’s quarterly summary of economic projections it released last week.

Twelve of 18 panel officials projected one more rate hike, with the committee set to meet again in late October and early December before the calendar shifts to 2027. Four officials forecasted two hikes, while two predicted consecutive holds.

Warsh, as he did when the FOMC released its last summary of projections in June, abstained from providing his input on what the panel will decide at its next two gatherings.