The Federal Reserve has just raised interest rates by 25 basis points, from 3.75% to 4.00%—the first rate hike since July 2023.
Federal Reserve Chair Kevin Walsh made the difficult decision because Trump opposes rate hikes.
As a result, the Federal Reserve and Walsh have passed the credibility test—at least for now.
A few details:
The decision was approved with a unanimous vote of 12–0;
The Fed’s median forecast shows that rates will be raised another 25 basis points in 2026.
If the Trump administration hadn’t “beautified” the jobs data and made the Fed feel that “job growth is strong,” there wouldn’t have been a second rate hike this year.
Federal Reserve Chair Kevin Walsh made the difficult decision because Trump opposes rate hikes.
As a result, the Federal Reserve and Walsh have passed the credibility test—at least for now.
A few details:
The decision was approved with a unanimous vote of 12–0;
The Fed’s median forecast shows that rates will be raised another 25 basis points in 2026.
If the Trump administration hadn’t “beautified” the jobs data and made the Fed feel that “job growth is strong,” there wouldn’t have been a second rate hike this year.
