The Federal Reserve ignored President Trump's demand for 1% interest rates, opting instead for a quarter-point hike to 4% to combat stubborn inflation and geopolitical economic pressures.
The Federal Reserve raised interest rates to a range of 3.75% to 4.00%, defying calls from President Trump to slash borrowing costs to 1%. Fed Chair Kevin Warsh cited persistent inflation, currently at 3.4%, as the primary driver for the hike, prioritizing price stability over political pressure to stimulate growth.
The Fed prioritized curbing inflation, which remains at 3.4%, well above their 2% target, and noted that the economy shows enough resilience to withstand higher borrowing costs.