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Fed Hikes Rates to 4%, Defying Trump's Calls for Cuts

Fed Hikes Rates to 4%, Defying Trump's Calls for Cuts

Fed Hikes Rates to 4%, Defying Trump's Calls for Cuts
Above: U.S. Fed chairman Kevin Warsh. Image credit: Andrew Harnik/Getty Images

The Spin


TheThis Fedis did exactly what an independent central bank is supposed to do: fight inflation instead of flattering the White House. A unanimous 12-0 vote and a quarter-point hike, the first since 2023, show thethat committee reads the data rather than the political mood. Holding steady after markets priced a hike at 92% would have pushed yields higher and torched credibility.

An oil supply shock cannotcan't be fixed with interest rates, and this small hike to 3.75%-4.00% proves the point. Higher rates produce zero extra barrels, zero refining capacity and zero repaired supply chains, while squeezing credit card borrowers, builders, manufacturers and a government refinancing trillions in debt. Punishing American enterprise for an energy crisis invites a recession.


Metaculus Prediction

There's a 50% chance that the Federal Reserve will set a target policy rate that is negative by Jan. 1, 2050, according to the Metaculus prediction community.


The Controversies



Go Deeper

© 2026 Improve the News Foundation. All rights reserved.Version 7.4.1

© 2026 Improve the News Foundation.

All rights reserved.

Version 7.4.1