“Fed megaphone”: If the Fed hikes again in October, Warsh’s relationship with Trump may face another test

Odaily News: “Fed megaphone” Nick Timiraos posted on X that Trump has consistently attacked the Fed for keeping interest rates too high, but after the Fed hiked rates this week, he claimed that he had already expressed approval of the decision during a phone call with Fed Chair Warsh a few days before the decision.

According to people familiar with the matter, the call between Trump and Warsh came as a surprise to many of the president’s close advisers. This “truce” posture clearly shows that Warsh has temporarily reversed the previously tense relationship in which the White House viewed the Fed as an adversary. The risk is that this situation may last only until the Fed hikes rates again.

A senior administration official said that if the Fed decides to hike rates again in October (on the eve of the midterm elections), Warsh may find himself under stricter scrutiny from Trump and his advisers.