Trump threatens trade cuts with Mexico, Europe after Fed rate hike

Washington — In a recent Federal Reserve meeting, the central bank voted unanimously to raise interest rates despite overt pressure from President Donald Trump, who publicly urged the Fed to lower borrowing costs. The decision, announced on Thursday, marked a continuation of the Fed’s policy tightening cycle aimed at curbing inflation, with the benchmark rate increased by a quarter percentage point to a range of 2.25%‑2.50%. Treasury Secretary Janet Yellen reiterated the board’s commitment to data‑driven decisions, emphasizing that the move reflects persistent price pressures and a robust labor market.

The president’s comments, delivered during a televised interview earlier in the week, suggested that lower rates would stimulate economic growth, but Fed Chair Jerome Powell and the board members maintained their independence, citing recent consumer price index reports and wage growth as justification for the hike. Financial markets responded with modest volatility, as the dollar strengthened and Treasury yields edged higher. The unanimous vote underscores the Federal Reserve’s resolve to prioritize inflation control over political considerations, signaling that future rate adjustments will continue to be guided by economic indicators rather than external pressure.