US President Donald Trump called for sharply lower interest rates after the Federal Reserve raised its benchmark rate by 25 basis points to a 3.75 per cent-4 per cent target range, marking the first increase since 2023 and defying Trump’s repeated calls to lower the rates.In a post on Truth Social, Trump said US interest rates “should be 1%, or less”, arguing that the country deserves lower borrowing costs because “We (US) are the Best Credit in the World — By far. Our country is booming with new investment!” “Lower the interest rates for the United States of america, and fast!” he added.Trump also linked his argument for lower rates to the US trade deficit, saying the country could make at least $1.5 trillion a year if it stopped trading with countries with which it runs a deficit. “If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year,” he said, adding, “The word “Deficit” is nothing more than a fancy word for LOSS. We are “carrying” almost every country in the World, and that cannot go on any longer.”Trump’s call came to lower rates this time came as the Federal Open Market Committee raised its target range to 3.75 per cent-4 per cent on Wednesday, marking the first US rate hike since 2023.The Fed said economic activity was expanding at a solid pace, with resilient domestic spending, strong productivity growth and robust capital investment. However, it said inflation remained elevated and that the rate increase would support a return to its 2% inflation goal.Fed Chair Kevin Warsh defended the decision, saying, “The plain fact is that inflation is too high and has been for too long.”“We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed. Today the FOMC decided that this standard has not been satisfied,” Warsh said.The White House had earlier criticised the rate hike as “unfortunate”. Senior deputy press secretary Kush Desai said higher rates would “stymie the economic progress” made under the Trump administration, raise mortgage costs and make it harder for businesses to expand.Read more: ‘Inflation too high for too long’: US Fed hikes interest rates for first time since 2023The Fed’s latest projections indicate that policymakers expect one more rate increase this year, while rates are projected to remain unchanged in 2027. Officials also raised their inflation forecast for 2026 to 3.7 per cent from 3.6 per cent previously and now expect inflation to return to the 2 per cent target only in 2029. The Fed last raised its benchmark rate in July 2023, when it increased the target range to 5.25%-5.50%.The unemployment rate stood at 4.1 per cent in August, and Fed officials expect it to remain around that level through the end of 2026 and over the following years.
