Trump appointee hikes rates over his demand for cuts, then tells him to stay in his lane

As it ran on the front

The Federal Reserve raised its benchmark interest rate by a quarter point Wednesday, the first increase since 2023, and the filing traces back further than the vote itself. On August 28, in a speech at the Fed, Chairman Kevin Warsh said the central bank "must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed" — otherwise, he said, there was work to do. A week later, on September 4, President Trump threatened to cut off trade with countries running a surplus against the United States unless the Fed lowered rates instead. On September 8, investors priced in a hike anyway. On September 11, the Hill reported that inflation in August had remained unchanged from the prior reading, still above the Fed's 2 percent target amid the war with Iran, with a hike looking more likely. On September 13, National Economic Council director Kevin Hassett told reporters he did not expect the trade threat to go to zero, but that the president held a strong opinion on where rates belonged.

On September 16, the vote came in: a quarter-point hike, which CBS reported the Fed pursuing to battle inflation driven by soaring energy prices. Trump's response, in full capital letters, was to demand the Fed "LOWER THE INTEREST RATES." He followed with the number he wanted — 1 percent or less, he said, because the United States carries the best credit in the world, by far. Warsh's answer came at the press conference the same day: the Fed would "stay in our lane."…