Trump Urges Rate Cut...Pressures Mount Ahead of Warsh's First FOMC Meeting

Kevin Warsh to Lead First FOMC Meeting
Trump: "Rates Should Be Lowered"

U.S. President Donald Trump argued that it would be a mistake for the Federal Reserve (Fed) to raise interest rates just because employment figures came in stronger than expected. However, he added that since Fed Chair Kevin Warsh is about to preside over his first Federal Open Market Committee (FOMC) meeting, he does not want to influence Warsh's decision.

In an interview with NBC aired on the 7th (local time), President Trump said, "These days, when positive economic indicators are released, the market actually falls due to concerns about a rate hike," adding, "There is absolutely no reason to raise rates."

President Trump further stated, "Raising the benchmark interest rate is the wrong thing to do," and insisted, "On the contrary, rates should be cut."

As the South Korean stock market experiences extreme volatility with a 'rollercoaster market' due to remarks by U.S. President Donald Trump, the KOSPI index at the Hana Bank headquarters dealing room in Jung-gu, Seoul, surged before the President's national address (left photo) but plunged over 2% (right photo) after the speech, continuing its sharp decline. April 2, 2026. Photo by Jo Yongjun

President Trump's remarks come as economic and political pressure mounts on Fed Chair Warsh, who will preside over his first FOMC meeting on the 16th and 17th. President Trump has previously called for rate cuts in public and has taken an adversarial stance toward the Fed.

The recent sell-off in the bond market and shifts in FedWatch projections reflect market expectations that the Fed under Warsh may ultimately raise rates to curb inflation exceeding its target. This is due to rising concerns about inflation as the labor market and the U.S. economy continue to show strength.

According to the U.S. Bureau of Labor Statistics (BLS), nonfarm payrolls increased by 172,000 in May. This figure nearly doubled market expectations. Numbers for the previous two months were also revised upward, and the unemployment rate remained at 4.3%.

As a result, Treasury prices fell (yields rose), and the market began fully pricing in the possibility that the Fed will raise its benchmark rate by 0.25 percentage points by the end of the year.

President Trump also said, "I have great respect for him (Fed Chair Kevin Warsh)," but added, "However, in my view, you shouldn't punish the economy by hiking rates immediately when things are going well." He continued, "We also have the national debt problem, and there are other issues to resolve," adding, "I want to increase defense spending further."

This content was produced with the assistance of AI translation services.