Trump says it would be wrong for the Fed to raise interest rates before Warsh’s debut

Trump in an interview with NBC Meet the press, tried to push back against market sentiment following a bleak US jobs report in May fueled bets that the Fed’s next move will be to raise interest rates to keep inflation under control.

« Today, when there are good reports, the market goes down because they think they’re going to raise rates, » Trump said. « There is no reason to raise interest rates. »

Trump’s comment, which was taped Friday and aired Sunday, adds to the economic and political forces rallying against Warsh as he prepares to chair the first meeting of the Federal Open Market Committee on March 16-17. June. Raising the benchmark rate « is wrong, » Trump said. « We should actually lower interest rates. »

Friday’s U.S. employment report showed that job gains in May exceeded all forecasts, which is encouraging treasury sale and get traders to fully price in a quarter-point increase in the Fed’s policy rate by the end of the year.

Trump appointed Warsh to lead the Fed after a relentless public campaign to cut the Fed’s borrowing costs, though he has since said he wanted Warsh to do « his own thing. »

In his comments to NBC, Trump hinted at his frustration.

« I live with Kevin, » Trump said. « I have a lot of respect for him, but I feel that when a country is doing well, it should not be punished immediately by raising interest rates. »

« You know, we’ve got debt, we’ve got other things, » he added, « We’ve got things we want to take care of. I want to go into the military more. »

Read more: Pressure mounts on Rookie Chair War as Jobs Fuel Fed-Hike bets

The bond market sell-off and the Fed’s recalibration of rates reflect growing confidence that the Fed under Warsh will need to raise borrowing costs to curb above-target inflation.

Economists at Goldman Sachs on Friday dropped their forecast for a rate cut by the U.S. Federal Reserve in December 2026, based on a stronger-than-expected U.S. labor market. They still expect a two-quarter point rate cut, but have moved the timing to 2027, in June and December.

Friday’s readings from the U.S. labor market bolstered interest rate hike expectations as nonfarm payrolls rose by 172,000 last month, following revisions in the previous two months, data from the Bureau of Labor Statistics showed. The US unemployment rate remained at 4.3 percent.

As Trump’s approval ratings have been depressed by public concern over the Iran war, his stewardship of the economy and high gasoline prices, he has argued that jobs and growth can help control inflation on their own.

« Now, if inflation comes and people live with inflation, but if inflation comes, what happens is you stop it, » he told NBC. « But success can kill inflation just like higher interest rates. »