'I know what he wants to do,' Trump says of Fed's Warsh as president presses for rate cuts

By Robert SchroederGreg Robb

'Rates should be lowered,' Trump says ahead of Fed meeting

President Donald Trump steps off Air Force One upon arrival to Oakland County International Airport in Waterford, Mich., on Monday. The president told reporters that interest rates should be lower ahead of a key Federal Reserve meeting this week.

Investors are puzzled about what the Federal Reserve will do at its meeting this week, including what measures new Chair Kevin Warsh will support - but at least one key figure seems sure of what the Fed's leader wants.

"I know what he wants to do," President Donald Trump told reporters en route to an event in Michigan. Warsh "wants to do the right thing," but is facing a Fed board that might oppose him, the president said.

"Rates should be lowered," Trump said, repeating his long-stated wish for cuts in interest rates.

His comments came ahead of the Fed's two-day meeting that ends Wednesday with a policy decision and a scheduled press conference. Traders say there is a 1 in 3 chance of an interest-rate hike at the meeting; that is the most uncertain the market has been about a rate decision in years.

Now read: Investors are in the dark about the Fed's decision this week - and that's just how Warsh wants it

Trump said Warsh is being hamstrung by his colleagues.

"You need the consent of some people who have perhaps bad intentions," Trump said, in his latest criticism of the central bank's leadership.

While the president appears to believe that Warsh wants to lower rates, Wall Street economists say they are in the dark, with the new chair remaining mum on key points.

"The July FOMC meeting is shaping up to be unusually enigmatic" given the lack of communication on Warsh's part, said Gregory Daco, chief economist at EY-Parthenon, in a post on LinkedIn.

Warsh has spoken frequently over the past six weeks, including during his first semiannual testimony to Congress, but "he has said very little," Daco added.

Things are so strange that even a routine announcement of the Fed chair's usual postdecision press conference on Wednesday made news. Such press briefings have been in doubt as Warsh has looked to reform the Fed's manner of communications.

One of the things Warsh has highlighted repeatedly over the past six weeks is his support for the Fed's 2% inflation target.

"Warsh's pledge of allegiance to the target seems to have convinced the business press he is an inflation hawk," said Ethan Harris, former chief economist at BofA Securities. But Harris said he agrees with Trump that Warsh wants to lower interest rates.

Warsh believes artificial intelligence will boost productivity, keeping inflation contained and allowing for lower rates. That indicates a forecast for a lower rate path that the rest of his colleagues, Harris said in commentary on LinkedIn.

-Robert Schroeder -Greg Robb

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07-27-26 1506ET