Trump says Fed rate increase would be wrong ahead of Warsh debut

President Donald Trump said the Federal Reserve would be wrong to raise interest rates as his nominee Kevin Warsh prepares to chair his first Fed policy meeting. Trump, in an interview with NBC’s Meet the Press, sought to push back against market sentiment after a blowout US jobs report for May spurred bets that the Fed’s next move will be a rate hike to keep inflation in check. “Nowadays when you have good reports, the market goes down because they think they’re going to raise interest rates,” Trump said. “There’s no reason to raise interest rates.” Trump’s comment, recorded Friday and aired Sunday, adds to the economic and political forces tugging at Warsh as he prepares to chair his first Federal Open Market Committee meeting on June 16–17. Raising the benchmark rate “is the wrong thing to do,” Trump said. “We should actually lower interest rates.” Friday’s US employment report showed May job growth topped all forecasts, prompting a selloff in Treasuries and leading traders to fully price in a quarter-point increase in the Fed’s key rate by the end of the year. Trump nominated Warsh to head the Fed after a relentless public campaign for the central bank to cut borrowing costs, though he has since said he wants Warsh to do his “own thing.” In his comments to NBC, Trump hinted at some frustration. “I’m living with Kevin,” Trump said. “I have a lot of respect for him, but my feeling is that when a country is doing well, they shouldn’t be penalized by immediately raising interest rates.” “You know, we have debt, we have other things,” he added, “We have things we want to take care of. I want to go bigger on the military.” Read More: Pressure Mounts on Rookie Chair Warsh as Jobs Fuel Fed-Hike Bets The selloff in the bond market and recalibration of Fed wagers reflects growing confidence that the Fed under Warsh will need to raise borrowing costs to contain inflation that’s running above target. Goldman Sachs economists on Friday scrapped their forecast for a Fed inter