Trump backs Warsh as Fed raises rates; contacts depart from precedent

Quarter-point hike ends three-year Fed pause, lifts target range to 3.75%-4%

President Trump said Wednesday he is standing by Federal Reserve Chairman Kevin Warsh after the Federal Reserve raised interest rates for the first time in three years. The Wall Street Journal reported the move as a reversal that began taking back cuts the central bank made last year and implicitly undercut the White House view that inflation is not a concern.

“I’m relying on Kevin. But he has a very tough board,” Trump told reporters Wednesday in response to a question on whether he had confidence in Warsh. “I talked to Kevin. I said ‘you might as well vote with the board because it’s not going to matter.’” He added, “I said ‘do what you want.’”

The Federal Reserve increased the benchmark federal-funds rate target range by a quarter point to between 3.75% and 4%. The Federal Open Market Committee approved the move unanimously. In interest-rate projections released after the meeting, most officials penciled in one additional hike this year. The effective federal funds rate averaged 3.63% in August 2026, according to Federal Reserve data, before the FOMC raised the target range this week.

Trump has spoken repeatedly with Warsh since Warsh became chairman of the Fed, The Wall Street Journal previously reported. Trump’s continued alliance with Warsh comes after he regularly criticized former Fed Chair Jerome Powell and even weighed trying to fire him.

Even as he backed Warsh on Wednesday, Trump reiterated his view that interest rates should go down. “Interest Rates in the United States should be 1%,” Trump wrote on Truth Social after the Fed’s decision.

According to The Wall Street Journal, Trump’s relationship with Warsh departs from recent precedent. The Journal reported that while it is not unusual for presidents and Fed chairs to meet on occasion, in recent decades the contacts have been more formal and choreographed to avoid the perception that the president is influencing rate decisions. Trump regularly bypasses the usual communication channels, the Journal reported, keeping up with a wide circle of contacts — including world leaders, business executives and lawmakers — through his personal cellphone.

Some past presidents have had closer working relationships with Fed chairs than others. President Bill Clinton liked then-Fed Chair Alan Greenspan and seated him next to first lady Hillary Clinton at his first joint address to Congress. President Joe Biden had only a handful of interactions with Powell during his single term. Recent presidents, from Clinton through Barack Obama, avoided publicly putting pressure on the Fed.

Contact between the White House and the Fed chair was more frequent in the 1960s, when the two sides met routinely. Such meetings became more limited after President Richard Nixon’s pressure campaign on Fed Chairman Arthur Burns preceded the inflation of the 1970s. By the 1980s, communications with the Fed chair were handled largely through the Treasury secretary.

Trump has chafed at the Fed’s independence more than any recent president. In an interview in December with the Journal, Trump said he wanted the Fed chair to consult with him on where to set interest rates. “I’m a smart voice and should be listened to,” he said.

At Warsh’s swearing-in ceremony less than six months later, however, Trump said something sharply different. “I want Kevin to be totally independent,” the president said. “Don’t look at me, don’t look at anybody. Just do your own thing and do a great job.”