The Federal Reserve unanimously increased its benchmark interest rate by 25 basis points to a target range of 3.75% to 4.00% on Sept. 16. President Donald Trump demanded that borrowing costs be slashed to 1% or lower but stated he still has confidence in Fed Chair Kevin Warsh. Trump described the Fed board as 'very hostile' and 'very political' while urging Warsh to remain independent from political pressure.

The decision represents the first rate increase since July 2023, with 16 of 18 policymakers forecasting at least one more hike before the end of 2026. Warsh warned that underlying inflation trends have not improved, a view Trump echoed after saying he spoke with the chair. The central bank maintains that current policy actions support a timelier return to its 2% inflation target.