U.S. President Donald Trump on Monday expressed support for Federal Reserve Chair Kevin Warsh, while insisting that the United States should have the lowest interest rates in the world. While endorsing his nominee for the Fed leadership, Trump questioned the motives of other Fed board members who are reluctant to ease monetary policy.
Speaking to reporters on Air Force One, Trump described Warsh as "terrific," but claimed that the Fed's board includes members he views as politicized. "Kevin is terrific, but he has a board, and the board members are very political, I must say. He wants to do the right thing. I know what he wants to do," Trump said.
Trump's remarks come as the Federal Open Market Committee (FOMC) is set to announce its latest interest rate decision in two days. Markets widely expect officials to hold rates steady, continuing the policy direction the Fed has taken consistently this year.
However, according to the CME Group's FedWatch tool, markets still see some probability of a rate adjustment, with about a one-third chance of a 25-basis-point hike.
Recently, several Fed officials have expressed concern over persistent inflation pressures. Among them, Dallas Fed President Lorie Logan, a voting member of the FOMC this year, has taken the most hawkish stance on tightening monetary policy. She has stated that the benchmark rate should be "moderately higher."
In his latest remarks, Trump again criticized Fed officials, suggesting that some policymakers might be obstructing rate cuts for ulterior motives.
"You need approval from people who may have bad intentions. Interest rates should be lowered. This country's GDP could be growing at 8%, 9%, 10%, 12% on an annualized basis. That's what it should be," Trump said.
He added, "We should have the lowest interest rates in the world, like we did thirty years ago."
Currently, the Fed's benchmark overnight borrowing rate target range stands at 3.5% to 3.75%. The rate has remained stable since the Fed cut rates by a cumulative 75 basis points in the second half of 2025.
Compared to other major global economies, the U.S. rate level is roughly in line with the Bank of England's, but still higher than the European Central Bank's 2.25% rate and Japan's 1% level.
Kalshi Traders' Expectations for Warsh's Speech This Week
Warsh is set to speak this week following the FOMC statement, and markets are watching the prediction platform Kalshi for signals on his potential policy messaging. Traders expect that energy prices and external risks may be key themes in Warsh's remarks, with "oil" and "shock" emerging as the most-watched terms.
At the conclusion of the June FOMC meeting, the Fed issued a relatively brief policy statement, and Warsh did not offer a forecast on the future rate path. He is likely to maintain a cautious tone this week, while Kalshi traders are trying to anticipate the specific language the new Fed chair might use in his press conference.
An event contract on Kalshi tracking Warsh's possible word choices in his next press conference shows a more than 50% probability of him mentioning "shock," and a 74% chance of mentioning "oil." As of Monday afternoon, this contract had become one of the most watched word-prediction markets on the Kalshi platform, with the final result to be determined based on Warsh's actual remarks during the press conference scheduled for 2:30 p.m. ET on Wednesday (2:30 a.m. Beijing time on Thursday).
Despite Kalshi traders seeing a high probability that Warsh will mention energy supply shocks, Bank of America said Monday that it would be "textbook policy" for the central bank to avoid directly responding to such concerns.
Evercore ISI stated that raising rates immediately after the June inflation data improved "would be odd," especially since the Fed could still choose to hike in September if necessary.
The firm also noted: "But we can't rule out that probability too much, because Warsh has refused to clarify his strategy, and the renewed escalation of the U.S.-Iran conflict has reignited energy supply shocks and pushed up yields."
Another Kalshi event contract on the Fed's July policy decision shows traders see a nearly 75% probability of maintaining the current rate level.
Meanwhile, a separate Kalshi contract on the timing of the next Fed rate hike shows markets price in a 68% probability of a rate increase within the year.
Both of these Kalshi contracts related to the future rate path will be settled based on the Fed's actual policy decisions.