United States of America

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

Is the this a vital show of independence against inflation or a self-inflicted recession risk in an oil shock?

3 hours ago·Updated 1 hour ago

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

Story

Above: U.S. Fed chairman Kevin Warsh in Washington, D.C. on Sept. 16. Image credit: Andrew Harnik/Getty Images

The Spin

Narrative A

This is 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 show that the 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.

Peter B on X

Mohamed A. El-Erian on X

Chris D. Jackson on X

Narrative B

An oil supply shock can't be fixed with interest rates, and this small hike 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.

Steven Fiorillo on X

JB and family on X