Fed Rate Tensions: Trump Attacks Fed, Inflation Re-Accelerating
Trump accused the Fed of 'hating' to cut interest rates for political reasons; meanwhile Dallas Fed data showed trimmed mean PCE re-accelerating to +2.8% annualized in September vs +2.0% in August, complicating the rate-cut outlook.
What we know
Trump's Fed comments made waves across multiple feeds. An account on X broke the headline 'TRUMP: FED HATES TO CUT INTEREST RATES,' which was amplified by another account on X and sarcastically celebrated by another account on X. Compounding the tension, another account on X reported the Dallas Fed's trimmed mean PCE printed +2.8% annualized in September vs. +2.0% in August — a re-acceleration that may justify the Fed's reluctance. Coinbase Predict meanwhile flagged a 77% market-implied probability of a rate hike this year — @CoinbaseMarkets. Crypto traders noted Bitcoin's resilience — flat on a day the Nasdaq fell 1.7% — another account on X.
How the story developed
Trump accused the Fed of 'hating' to cut interest rates for political reasons; meanwhile Dallas Fed data showed trimmed mean PCE re-accelerating to +2.8% annualized in September vs +2.0% in August, complicating the rate-cut outlook.
The US economy grew at an annualized 3.4% in Q3 (beat: 3.2%), supercharged by AI capex spending. PCE inflation held at 3.6% YoY while the personal savings rate fell to a 4-year low of 3.8%, with Kobeissi Letter calling a December rate hike.
The Fed's latest FOMC press conference was widely panned as incoherent, with Jim Bianco noting the Fed wants to dismantle post-GFC communication structures including the dot plot and press conferences; BofA now expects 25bps hikes in Dec 2026 and March 2027.
Fed Chair Warsh struck a dovish tone at the FOMC presser, but markets remain priced for a December hike — with an Iran peace deal seen as the key variable for oil prices and Fed action.
The FOMC held rates steady with two hawkish dissents, Fed Chair Warsh signaled data-dependence and deflected Trump criticism; Q3 GDP and core PCE print tomorrow at 8:30 AM ET.
The Fed held interest rates steady, with two dissenters (Cook and Hammack) favoring a hike. Demand-driven PCE inflation components hit their highest contribution since September 2023, and Tom Lee's key takeaway was that AI growth isn't necessarily inflationary.
The Federal Reserve held benchmark rates at 3.75%–4% with two dissents (Cook, Hammack) voting to hike. Chair Warsh said inflation is 'too high' and has been above 2% for 6 years, but stopped short of hiking, leaving markets parsing his tone as neutral-to-dovish relative to expectations while December hike odds jumped to 75–86%.
The Federal Reserve kept rates unchanged in a 10-2 vote, with Governors Cook and Hammack dissenting in favor of a 25bps hike. Markets see ~85% probability of a December hike, with all eyes now on Fed Chair Warsh's press conference.
Markets are pricing an 84% chance of a Fed rate hike ahead of today's FOMC decision, driven by the worst inflation read in years. Most analysts expect rates to hold today but see a December hike as highly probable.
Markets price a near-certain hold today, but the Kobeissi Letter and UBS expect the Fed to signal a December rate hike — which would bring 2026 total hikes to +50bps — amid stubbornly high inflation.
Sources
“77% chance the Fed raises rates again this year”
View post →By the Global Eye 24 desk, with AI assistance. Updated as the story develops. Spot an error? Write to corrections@globaleye24.com.