Donald Trump has renewed his call for lower borrowing costs in the United States, even as financial markets put the probability of a quarter-point Federal Reserve rate increase at 66.4%.
Speaking in the Oval Office on Monday, the US president was asked whether he opposed Federal Reserve Chair Kevin Warsh considering an increase.
Trump said he had not discussed the issue with Warsh and would not attempt to persuade him against raising rates.
“I have a lot of respect for him, and he’ll do what he has to do,” Trump told reporters.
However, Trump also argued that the United States “should have the lowest interest rates in the world”. He said that when the US economy was performing well, the central bank should respond by cutting borrowing costs.
His remarks continue a long-running campaign for cheaper money. Trump previously criticised former Fed Chair Jerome Powell, describing him as “too late”. His comments about Warsh have been more measured, with praise for the current chair followed by calls for lower rates.
In mid-August, Trump said the federal funds rate was “artificially high” and said the Federal Reserve should reduce borrowing costs as soon as possible.
Warsh has so far shown little sign of following that advice. At the Federal Open Market Committee’s meetings in June and July, he and the board left the federal funds rate unchanged. Three board members supported a quarter-point increase.
Warsh has also removed forward guidance from the Federal Reserve’s approach, arguing that markets should focus on the state of the economy rather than waiting each month for an indication of the central bank’s next move.
Before Warsh took the role, markets already viewed him as hawkish. His first speech at Jackson Hole strengthened that impression.
Warsh said recent inflation figures were higher than the central bank wanted, but added that they “do not tell me that underlying trends have meaningfully improved.”
He also said: “the Fed’s predominant focus right now should be on prices.”
Markets fell about an hour after the speech. The CME FedWatch tool, which uses futures-market pricing to assess expectations for changes in the federal funds rate, initially put the chance of a rate increase at 57%. By Tuesday, 1 September 2026, that probability had risen to 66.4%.
Bets on prediction markets are pointing in the same direction.
CNBC Mad Money host Jim Cramer said on X that he could not see how interest rates would fall with Warsh now leading the Federal Reserve.
“I don’t see how rates can go down now that we see Warsh as a serious practitioner, the president unable to stop the war, the allies in the region depending almost entirely on us, and oil stocks headed back up quickly. Unholy developments,” Cramer wrote.
US markets also opened lower on Tuesday. The Dow Jones Industrial Average fell by 374.09 points, while the NYSE Composite dropped 123.23 points. The tech-heavy Nasdaq Composite lost 31.54 points and the Standard & Poor’s 500 declined by about 25.62 points.
Precious metals were also under pressure. Gold fell 2.44% over the previous 24 hours to trade at $4,339 per ounce, while silver also declined.
Bitcoin, sometimes referred to as digital gold, was nearly 1% lower at the start of Wall Street trading, standing at $77,778 per coin.
Prediction-market traders are also committing millions of dollars to bitcoin price targets ranging from $50,000 to $150,000.
