Federal Reserve is expected to raise its benchmark rate, defying Trump’s demands

Live updates

1. 1h ago

   Federal Reserve Expected to Raise Benchmark Rate Despite Trump Demands

   The Federal Reserve is preparing to increase its benchmark interest rate for the first time in three years. This anticipated move comes amid stubborn inflation and occurs despite demands from Donald Trump for the opposite action. Kevin Warsh faces a difficult internal vote and a potential showdown with Trump, as the hike would test the current truce between the administration and the central bank. Markets have largely locked in the expectation of a rate increase to maintain Fed credibility and curb rising prices.

   Why it matters

   The arrival of Kevin Warsh previously ended a period of conflict between Donald Trump and the Federal Reserve. A rate hike now threatens that stability and risks a repeat of the communication failures seen in July. The decision reflects a tension between political pressure and the bank's mandate to manage inflation.

   What is confirmed

   • The Federal Reserve is expected to raise its benchmark interest rate.
   • This would be the first rate hike in three years.
   • The expected rate increase defies demands made by Donald Trump.

   Still unconfirmed

   • A rate hike would test the truce between Trump and the Fed established upon Warsh's arrival.

   What to watch next

   • The official vote outcome of the Federal Reserve meeting
   • Kevin Warsh's public response to the rate decision
   • Donald Trump's reaction to the benchmark rate change
   Sources used for this update (14)

   1. CNN — The Fed is preparing to raise rates. What if it doesn’t work?
   2. Reuters — Fed's table is set for a rate hike, a first under Warsh
   3. Fortune — 'The bond market has taken down more governments than howitzers': Scott Bessent cuts Kevin Warsh some slack ahead of anticipated rate meeting
   4. CNBC — Counting the votes: Warsh faces a tough battle as the Fed girds for expected interest rate hike
   5. axios.com — How Warsh can avoid a repeat of July's communications mess
   6. WSJ — Warsh’s Arrival Ended Trump’s War With the Fed. A Rate Hike Would Test the Truce.
   7. AP News — Federal Reserve is expected to raise its benchmark rate, defying Trump’s demands
   8. The Washington Post — Opinion | Raising interest rates will curb inflation and maintain Fed credibility
   9. The New York Times — Warsh Set for Showdown With Trump as Fed Faces Pressure to Raise Rates
   10. Indianapolis Business Journal — Federal Reserve expected to raise benchmark rate, defying Trump’s demands
   11. Bloomberg.com — History Shows Fed Will Deliver Rate Hike Markets Have Locked In
   12. Yahoo Finance — Fed meeting live updates: Anticipation builds with Fed expected to hike interest rates for first time in 3 years
   confidence 90%