Trump could reopen Fed independence debate after rate hike

Federal Reserve Chair Kevin Warsh helped trigger a fresh debate over central bank independence after the Federal Open Market Committee raised interest rates by 25 basis points on Wednesday. The decision came even as President Donald Trump and administration officials had urged the Fed to avoid higher rates or to cut them instead. Warsh said the move was driven by economic conditions, especially inflation that remains above the Fed’s 2% target. He did not address politics directly in his remarks and declined to comment when asked for a message to Trump. The rate increase could strain the already uneasy relationship between the White House and the Fed. Trump selected Warsh to lead the central bank earlier this year after losing confidence in Jerome Powell, but he has also criticized prior Fed decisions. The administration has other possible pressure points, including efforts involving Fed Governor Lisa Cook, former Chair Powell, and supervisionrelated investigations, which could further test the informal truce around the central bank.