The Federal Reserve increased interest rates by 0.25 percentage points and plans to raise them again later this year. According to the updated dot plot, the median rate projection for 2026 stands at 4–4.25%, suggesting another rate hike may occur before year-end.
At a press conference following the decision, Wash stated, “We are reducing some of the accommodative policy to bring financial and credit conditions more in line with our ultimate goals. Today’s action begins to signal that we are serious about achieving price stability.”
Trump posted on social media that U.S. interest rates should be at 1% or lower, though he did not directly criticize Wash.
“We’re practically propping up every country in the world, and this can’t go on any longer,” Trump said. “Lower U.S. interest rates immediately!”
Wash reiterated his concerns about inflation when speaking to reporters, noting that annualized price increases over both six- and twelve-month periods exceeded 3% across too many categories of goods and services. “The inflation data this summer hasn’t given me the sense that underlying trends have meaningfully improved,” he said.
His remarks about removing “some degree of accommodation” also drew attention from Fed watchers.
Michael Gapen, chief U.S. economist at Morgan Stanley, commented, “If the Chair believes policy is still loose, then you’ve got more work to do—this is very hawkish.”
Oscar Munoz, chief macro strategist at TD Securities, said, “Clearly, the Fed is focused more on inflation right now. That’s why they raised rates today, and it seems there are further hikes ahead.”
The latest rate forecasts released by Fed officials on Wednesday showed the median expectation for rates by the end of 2026 rising from 3.8% to 4.1%, indicating growing market support for a series of tightening measures.
When asked by a reporter on Wednesday what he would say to Trump, Wash replied, “I don’t have anything to say about discussions with the president.”
However, Wash highlighted the strong performance of the U.S. economy and reaffirmed that officials do not believe overall financial conditions will dampen economic growth.
“The U.S. economy appears to be strengthening. Given this resilience and the potential for even greater achievements ahead, the tone I’ve heard at the Federal Open Market Committee (FOMC) meetings these past two days has been optimistic,” he said.
