FEDERAL RESERVE RAISES INTEREST RATES, TRUMP CRITICISES MOVE

The Federal Reserve raised its benchmark interest rate by a quarter of a percentage point on Wednesday, taking the target range to between 3.75% and 4%, according to the central bank. The Federal Open Market Committee voted unanimously in favour of the increase, its first rise in the federal funds rate since 2023. The Fed said inflation remained elevated and that the move would support "a timelier return" to its 2% inflation target. President Donald Trump criticised the decision within hours, writing that interest rates "should be 1%, or less" and calling on the Fed to lower rates "FAST". Trump said the United States holds "the Best Credit in the World" and argued that ending trade deficits with other countries would generate at least $1.5 trillion a year.

The rate rise was overseen by Federal Reserve Chairman Kevin Warsh, whom Trump elevated to the role in May after months of pressuring his predecessor, Jerome Powell, over interest rates Trump considered too high. Warsh has said the Fed bears responsibility for "65 months of sustained, elevated inflation" and said in August that policymakers needed confidence inflation was moving towards its target "clearly and at sufficient speed" before easing policy. Speaking after Wednesday's announcement, Warsh said the central bank's main focus was now on inflation. The Fed's Summary of Economic Projections, published alongside the decision, indicated policymakers expect at least one further quarter-point increase before the end of the year, with none anticipated in 2027, according to the projections.

Trump's post came as he was travelling to North Carolina to campaign for Senate candidate Michael Watley, hours after the Fed's announcement. The exchange highlights continuing tension between the White House and the Federal Reserve over monetary policy since Trump's own pick took over as chairman. The Fed has given no indication that it plans to change course, and Warsh has said the central bank's primary concern for now is returning inflation to its 2% target, according to his comments this week. Policymakers' own projections point to further tightening before the year is out, with at least one more rate increase pencilled in, according to the Fed's projections.