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Trump Says US 'Carrying' the World, Calls for Lower Rates — Chuck Schumer Calls It 'The Inevitable Result' of President's 'Failures'

Benzinga · 3d ago

President Donald Trump slammed the Federal Reserve for raising interest rates Wednesday, renewed his demand for rates at 1% or lower, and urged the Fed to cut rates quickly.

Demands Rates At ‘1%, or Less

“Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World, BY FAR,” Trump said in a post on Truth Social, adding that “our Country is BOOMING with new Investment.”

He claimed that the U.S. is “carrying” much of the world through trade deficits, calling the word “deficit” nothing more than “a fancy word for LOSS.”

“LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!”

Read Also: Iran's Speaker Mocks Kevin Warsh-led Fed's Rate Hike: 'You Can't 25bp a Chokepoint' — Tehran Says It Sets the Risk Premium

Schumer Says Blame Falls on Trump

The Kevin Warsh-led Fed raised its benchmark rate by 25 basis points Wednesday to a range of 3.75% to 4.00%, its first hike since 2023, with all 12 voting members backing the move unanimously.

Senate Minority Leader Chuck Schumer (D-N.Y.) said Trump’s own pick doesn’t shield him from blame.

“His economy is awful, and it’s getting worse by the day,” Schumer added, calling the hike “the inevitable result of his failures.”

Rep. Ted Lieu  (D-Calif.) sarcastically said Warsh “must be a Democratic operative” who should be fired.

The Vote Reveals Who Kevin Warsh Really Is

Economist Justin Wolfers said that the unanimous 12-0 vote was the most important signal to come out of the decision, since it showed Warsh voted for higher rates despite Trump’s public pressure for cuts, evidence, the University of Michigan professor said, rules out the fear that Warsh would act as a “sock puppet” for the White House.

The Fed had little choice given markets had already priced in a 92% probability of a hike, economist Mohamed El-Erian said, arguing that holding rates steady against such strong expectations likely would have driven market yields even higher.

Former Fed economist Claudia Sahm said Warsh did a good job explaining the conditions behind the hike but failed to clarify what would stop future increases, calling the outcome “a hawkish hike.”

‘Fed Was Backed Into a Corner’

Investor Peter Schiff said the Fed was “backed into a corner” by market expectations rather than acting independently, and that it “didn’t put up enough” when forced to act.

James Thorne, Chief Market Strategist at Wellington Altus, called the hike a “policy mistake,” saying it raised rates into what he described as an energy-driven “negative growth shock” that rate hikes can’t fix, and said Warsh is “shaping up to be worse” than former Fed Chair Jerome Powell.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: IAB Studio / Shutterstock