Trump says he will not influence new Fed Chair Warsh — and renews call for rate cuts

To support his demand, Trump also pointed to the development of US gasoline prices. „Well, it depends. I mean, it depends on how the war develops,“ he said when asked about possible further price increases. Higher fuel prices would further fuel the already high inflation in the United States, he warned.

At the same time, Trump did not rule out that the already high gasoline prices in the US could rise further. A rate hike would, in his view, be counterproductive: it would cool the economy and further intensify inflation through the energy channel. Economists, however, take a considerably more skeptical view of the situation.

Economists see a rate hike as possible

The Federal Reserve's next rate decision is scheduled for mid-June. According to economists, the key interest rate corridor currently ranges from 3.5 to 3.75 percent. A raise in this corridor is considered possible by economists.

Given the strong US labor market, economists currently consider a loosening of monetary policy unlikely. They point to persistently high inflation resulting from the Iran war. This price pressure is the main reason a rate hike cannot be ruled out.

Trump disagrees with this assessment. „There is no reason to raise interest rates,“ he said in the NBC News interview with a view to the upcoming Fed meeting. Once again, the political expectations of the White House and the analysis of economists collided.

Central bank independence under discussion

The background to the debate is the leadership change at the head of the central bank: Kevin Warsh has been identified as the new Fed Chair. Regardless of who is at the top, the Federal Reserve is supposed to set its monetary policy based on the available facts, independent of political influence. Whether Trump is seeking to avoid new tensions with his public restraint in the interview cannot be gleaned from the available sources.

Economists stress that the Fed's monetary policy decisions have far-reaching consequences for the US economy and international financial markets. If the central bank raises interest rates, this could push borrowing costs for consumers and businesses even higher. A cut, by contrast, would further fuel inflation.

Overall, the interview illustrates the ongoing tension between the Trump administration and the Federal Reserve. While the president is pushing for economic support through lower interest rates, economists — given the strong labor market and war-driven inflation — see the possibility of further tightening.

Outlook: Rate decision in June

According to the available information, further developments will depend, among other things, on the course of the Iran war and its impact on energy prices. Should the conflict continue to push up gasoline and oil prices, inflationary pressure in the US is likely to persist — and the pressure on the Federal Reserve to respond with monetary policy will increase.

The next rate decision in mid-June will show whether the Fed heeds the political call for cuts or follows the economic data. One thing is clear: in the interview, Trump publicly spoke out against direct interference in the central bank, while making his substantive position unmistakably clear.