President Donald Trump has changed his approach to the Federal Reserve's leadership, now showing unusual patience with Chair Warsh even as rate hikes loom. Trump, who once repeatedly attacked former Chair Jerome Powell for moving too slowly on rate cuts, said in an interview that the final direction of interest rates is not decided by the Fed chair alone. Asked whether Warsh should pause rate increases before November's midterm elections, Trump responded with a milder tone than usual and directed his pressure at the Federal Reserve Board. He described the board as "very politicized," and stressed that decision-making power rests with the whole board, renewing his criticism of Powell and board member Cook. Warsh was formally confirmed in May. People familiar with Warsh's thinking say that if inflation data due in the coming weeks remain hot and market expectations for higher borrowing costs keep rising, he is prepared to raise rates at the September meeting without hesitation. Trump's tolerance for the current chair has increased markedly since Warsh took office.
Donald Trump's stance toward the Federal Reserve's top job has turned noticeably softer. The president, who once hammered Jerome Powell for holding back on rate cuts, now appears willing to give current Fed Chair Warsh room to maneuver — even as the prospect of higher rates hangs over the economy.
Asked in an interview whether Warsh should pause rate increases before the November midterm elections, Trump responded in a far more temperate tone than his usual Fed commentary. He said the eventual path of interest rates is not something the chair decides alone.
The president instead directed his pressure at the Federal Reserve Board. "It depends on him a little bit, but not entirely. He has a very politicized board," Trump said. He went on to stress that the whole board holds the decision-making power, reiterating his familiar criticism of both former Chair Powell and board member Cook.
Warsh was formally confirmed in May. Before that, Trump repeatedly attacked Powell for being too slow to lower borrowing costs. His recent comments mark a clear rise in tolerance for the current chair. People familiar with Warsh's thinking say he is prepared to raise rates at the September meeting without hesitation, provided that inflation data released in the coming weeks remain hot and market expectations for higher borrowing costs keep building.
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