Warsh’s reluctant turn restarts Fed war
TLT•Context: Fed meeting and rate outlook
The Federal Open Market Committee raised the target rate for federal funds by a quarter percentage point to 3.75-4.00% on September 16.
Federal Reserve officials expect one more interest rate increase this year and expect to hold steady in 2027, quarterly projections released after their latest policy meeting showed.
Fed rate increase revives White House pressure
On Wednesday, U.S. Federal Reserve Chair Kevin Warsh became his predecessor, Jerome Powell. Perhaps not in his own eyes or in the eyes of investors, but, crucially, to the White House that appointed him. The central bank announced an increase in the federal funds rate, and a clear intent to lower inflation, perhaps through further hikes. That won’t please President Trump, who thinks rates should be “1%, or less”. The administration’s campaign for easy money and against Federal Reserve independence is now likely to return in earnest.
