Trump says 'hard to believe' US Fed would raise rates

PARIS

U.S. President Donald Trump on June 17 said he found it "hard to believe" that the Federal Reserve would raise interest rates after the central bank projected one rate hike by year-end to tame inflation.

"It's hard to believe. It just keeps the country down and it's so unusual," Trump told reporters at Orly airport outside Paris.

"But we have a very good guy over there right now so I'm guided by what he wants," he added, referring to new chair Kevin Warsh, whom he nominated.

The Fed kept its key rate unchanged at 3.50 to 3.75 percent for the fourth consecutive meeting on June 18 yet almost half the central bank’s policymakers said they could support a rate hike later this year.

In an unusually short statement after their two-day meeting, the officials dropped language that had suggested their next move would be to cut the key rate. The brief statement reflects the influence of  Warsh, who has previously criticized the Fed for commenting too broadly on the economy.

Warsh, in his first news conference as chair, also underscored the Fed’s determination to bring inflation down to the central bank’s 2 percent target, suggesting he will take a hawkish approach as chair.

Warsh had supported rate cuts last year while under consideration to be Trump’s pick as Fed chair to replace Jerome Powell. Since returning to the White House last year, Trump repeatedly attacked Powell for not cutting rates more deeply.

Warsh did not hint whether he was leaning toward hiking rates, but economists saw his message at the press conference as hawkish.