Trump Avoids Direct Confrontation with Fed Chair as Rate Hike Sparks Tension

U.S. President Donald Trump expressed anger over the Federal Reserve's decision to raise interest rates, posting on Truth Social that 'U.S. rates should be at a mere 1% annually' because 'we have the world’s best credit standing.' He added, 'We are propping up nearly every country in the world, and this cannot continue,' demanding lower rates 'immediately.'

White House Press Secretary Karine Jean-Pierre criticized the Fed's decision on Fox News, stating it lacked 'convincing justification.' However, Trump did not directly blame Fed Chair Jerome Powell. When asked about his relationship with Powell, he said, 'I trust Kevin (Powell), but he has a very difficult board,' adding that he had discussed the matter with him before the vote.

Powell, during his press conference, stated that Fed independence requires maintaining 'each party's domain,' emphasizing that 'we can only fairly assess issues if everyone stays within their respective areas.' His comments appeared to address Treasury Secretary Scott Bessent, who recently voiced public opposition to rate hikes.

Concerns over Fed independence are mounting ahead of the October FOMC meeting. With November 3rd midterms approaching, Trump may intensify pressure to block further rate increases. Predictive market platform Kalshi shows a 66% probability that Trump will publicly criticize Powell before year-end, up from 44% prior to the FOMC announcement.