President Donald Trump vented his displeasure Wednesday after the Federal Reserve Board voted unanimously to raise interest rates. “The interest rates are too high. They’re not appropriate,” Trump told reporters. “The country barrels through everything because we’re doing so well. But the interest rates are too high.” In response to inflation that remains above the 2% target, the Federal Reserve raised the bank-to-bank interest rate by one quarter percentage point, to a range of 3.75%-4.0%.

President Trump blamed the shift not on Federal Reserve Board Chairman Kevin Warsh, whom he appointed earlier this year, but on other Federal Reserve officials, who he said were playing politics.

“I’m relying on Kevin, but he’s got a very tough Board, a board that was put there by a lot of other people,” Trump said. “I talked to Kevin, and I said, ‘you might as well vote with the Board because it’s not going to matter.’ The Board is hostile and political. They’re doing the wrong thing. They’re a bunch of politicians — or people put on by politicians. It’s a shame because it’s too high, the interest rates.”

This is technically true. By definition, every appointed official is put in place by politicians, even those officials appointed by Trump. Thus, while true, the relevance of this fact is unclear.

However, Trump’s comments do raise the possibility that the Federal Reserve’s unanimous vote was the result of political posturing rather than a shared judgment regarding the economic fundamentals of America’s monetary situation.

While the vote was unanimous, “whether or not that was entirely voluntary is unclear,” suggested E.J. Antoni, chief economist for the Institute for Economic Policy Studies and a fellow at the Heritage Foundation, on “Washington Watch.” “Imagine you’re Kevin Warsh and you only have one, maybe two other members on the board who are going to vote with you. That looks like weakness.”

“And so, do you want to go along with everybody else and have a unanimous vote and have the appearance of strength, which could very much help you in the future?” he added. “Or do you want to do you want to show that the Fed is deeply divided and that the chairman isn’t even in the majority? I don’t know what the answer is there.”

If Antoni’s theory is correct, then Warsh was the one taking a politically calculated vote. “It’s pure speculation on my part,” Antoni hastened to add. “I’m not inside the room, so I have no kind of intelligence.” However, he cautioned, “based on Warsh’s past comments, I’m not sure that that he was necessarily in favor of hiking” rates. “I think he understands that the reason that prices have been rising recently is not a monetary problem. It’s an energy problem, right? And you can’t fix an energy story with monetary tools.”

Another possibility is that Warsh’s inflation concerns predate the Iran war. “The plain fact is that inflation is too high and had been for too long,” Warsh insisted after the vote. “Not one of my FOMC [Federal Open Market Committee] colleagues is under any illusion,” he said. “We have begun a new chapter and we understand that the 5+ years of inflation above target cannot be cured in 9 weeks or by a single month of modest price decreases.”

Inflation “has been a tax on the American people and businesses. We plan on getting rid of that tax,” Warsh explained. “That means we need a regime change in policy, and we need new consideration of practices, some of which have been working, some of which haven’t.”

Federal Reserve projections show that 12 out of 18 governors (two-thirds) expect another rate increase this year, while four expect two more.

By contrast, President Trump has called for the Federal Reserve to slash interest rates by at least 75%. Earlier this month, Trump responded to a solid August jobs report, “Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago!” He repeated that stance in a Truth Social post Wednesday, “Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR.”

The basis for this statement consisted solely of comparative economics and trade considerations. “Our Country is BOOMING with new Investment!” Trump reasoned. “If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year. The word ‘Deficit’ is nothing more than a fancy word for LOSS. We are ‘carrying’ almost every country in the World, and that cannot go on any longer.”

To fulfill its low-inflation mandate, however, the Federal Reserve must focus on the economic indicators coming from America’s own economy, not from trade deals, or even deficits. And those indicators show that inflation remains elevated at an annual rate of 3.4% — nearly double the 2% target. Higher interest rates are needed to squeeze out the remaining inflation.

Trump repeated another point worthy of further investigation. After claiming on Truth Social that the U.S. had the “best credit in the world — by far,” Trump repeated the claim to reporters, “We should be paying the lowest rates anywhere in the world because we have the strongest credit.”

Often, when Trump uses imprecise layman’s English, the basic point is still understandable. But here, it seems more likely that he is simply mistaken. The U.S. government does not have the best credit rating and has not had it for several years. Fitch downgraded America’s credit rating in 2011, followed by Standard & Poor in 2023 and Moody’s in 2025. These credit rating agencies cited the U.S. government’s large, growing deficits and apparent inability to address them. A comparison by Trading Economics ranks the U.S. at 97 out of 100, in a tie for 12th place.

If the U.S. dollar were not the world’s reserve currency, suggests the Peter G. Peterson Foundation, its massive debt (122% of GDP) and deficit (8% of GDP) would likely drive its credit rating even lower. If by “best credit” Trump meant something other than “best credit rating,” that rating is not immediately clear.

Even if the U.S. did have the best credit rating, it would not necessarily follow that it “should” set an interest rate lower than every other country. It is possible for governments to set bad policy, such as establishing an interest rate benchmark far lower than what is necessary to control inflation. Many Western governments did just that following the Great Recession, including the U.S. government, which pretended that a near-zero federal funds interest rate was the new “normal.” Because of such poor monetary policy, many currencies suffer from persistently high inflation. If the U.S. were to take these countries and their degraded currencies as a model, then America’s currency would suffer a similar loss in value, especially because of the U.S. government’s uncontrolled deficit spending.

Lower interest rates would certainly help the U.S. government meet its fiscal objectives. The Treasury Department must refinance roughly $10 trillion in debt that matures this year, and higher borrowing costs will only make that debt more expensive.

But this fact only serves to illustrate that what the president said about trade is also true about budgets. “The word ‘Deficit’ is nothing more than a fancy word for LOSS.” A country whose government loses nearly $2 trillion in value annually is not pursuing the policies necessary to justify rock-bottom interest rates.

President Trump’s basic problem appears to be a pursuit of contradictory economic goals. On the one hand, he wants low interest rates to boost the economy. On the other hand, he wants high tariffs (which drive up costs), promises cash handouts (which drive inflation proper), and has stumbled into a foreign war that is driving fuel prices sky high.

“I have no idea what’s going on with the $5,000 payment plan,” Antoni admitted, “no idea where that came from, where the money would come from to finance it. That is entirely unclear. How on earth you can spend another dime right now without increasing the deficit, and therefore the debt, is completely unclear to me.”

The Federal Reserve’s congressional mandate is not to pursue a policy that helps the president win an election, but to pursue a policy that 1) keeps inflation at a 2% average while 2) maximizing employment. The Federal Reserve has failed to achieve the first part of that mandate for five straight years, and the new chairman President Trump appointed is determined to turn that around.

Thus, demands for the Federal Reserve to slash interest rates while everything grows more expensive are demands that fall (or should fall) on deaf ears.

Antoni already sees signs of improvement with a structural reform. “Whether you think the Fed should have raised rates, cut rates, [or] left them alone today, I think one of the things that’s positive about today is the fact that the Fed did not try to lead the market around by the nose,” he explained. “The Fed is really following markets.” He pointed to investment interest rates rising by approximately one percentage point since the start of the Iran war “due to higher inflation expectations because of the disruptions that the war has caused to energy markets.”

“That’s why I don’t think there’s going to be much of an impact here on things like the interest rate on a 30-year mortgage or the interest rate on credit cards,” he predicted. “Those interest rates have already been rising before today’s decision. … This is, I think, the Fed following markets as opposed to trying to lead them like they did under Powell.”