FED is not making a DIFFICULT decision, FED is making an easy one.
The reason behind that decision is simple: INFLATION.
This time, with the FOMC standing completely united, they dropped the first rate hike since 2023 against a furious President — and for once, the President aimed his fury straight at the decision, rather than the man.
The Federal Reserve raised its benchmark rate by a quarter point on Wednesday, and did it with a vote that had no dissents. Nine-zero — or by some counts twelve-zero across the voting and non-voting participants who signaled support. In a committee of economists trained to hedge, unanimity is itself a statement: nobody on the FOMC thought this one was close.
That the vote was unanimous is more remarkable than the size of the move. Kevin Warsh was installed as Fed chair in May specifically because President Trump wanted lower rates and believed Warsh would deliver them. Trump said as much himself in February, remarking that he would not have picked Warsh had he wanted hikes. Seven months later, Warsh’s first meaningful act as chair was to raise rates — and to bring every other voting member of the committee with him.
Trump’s response arrived within hours, in the register the market has come to expect.
“LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST,”
he posted, arguing the country was “carrying” the rest of the world and could not go on paying for it. He wants the rate at 1 percent or below — roughly 275 basis points beneath where Warsh just left it.
[CHART 1 — Fed Funds Rate vs. Trump’s Public Rate Demand]
What Didn’t Happen
What really matters is the one happened behind the scene, not the Headlines.
When Trump wanted lower rates from Jerome Powell, he got there by attacking Powell personally — public insults, a Justice Department inquiry into Powell’s congressional testimony that was later dropped, sustained pressure on his fitness for the job. None of that has been aimed at Warsh. When he was asked directly on Wednesday whether he thought Warsh had caved to White House pressure, Trump said no. Ironically, when Trump is asked whether he still had confidence in his own pick, he still said yes.
That tells you everything you need to know. He can't even be mad about not getting his rate cut; instead, he's handed a quiet 9 to 0 vote—and that’s a very strong signal and gesture to the U.S. President
Of course Trump is mad at the fact that there is 0 rate cut but as leader, there is nothing he can do now.
What’s worth mentioning is that this is not just the one-off rate hike, in my previous article, I have clearly list out all reasons:
Even if he gets rate cut, the real interest rate still goes up.
High energy price is leading imminent inflation input and that requires prompt rate hike.
One off 25 bps rate hike is clearly not enough as HORMUZ situation is till the pain in the *ss.
The PEACE DEAL never exists, US is running out other options, if US DOES NOT WIPE THEM OUT, they won’t take any bargain(the world already saw it many times
The QUITE HIKE
Silence is power; being loud doesn't show strength. Trump is the perfect example of why shouting can often be perceived as weakness.
Part of what made unanimity possible is that Warsh built his case on ground Trump’s own data doesn’t fully contest. At Jackson Hole, Warsh noted that 54 percent of the 199 components in the PCE price index had risen more than 3 percent over the prior year — an argument that inflation is broad-based, not just an artifact of oil prices or tariffs the administration can wave away.
The administration counters with three-month annualized core CPI running at 1.6 percent, comfortably under target. Both numbers are real. They are measuring different things, and Warsh chose the one that let him hike without contradicting the disinflation narrative the White House has been selling all year.
[CHART 2 — Same Economy, Two Lenses]
Warsh has also declined, even for twice now, to offer any forward guidance not even dot-plot — telling reporters he prefers officials have “a good family fight” over the data rather than commit to a path.
That is either genuine data-dependence or a chair keeping his options open so that no single word can be read as either capitulation to or defiance of the White House. Both readings are consistent with a man trying to run a rate-hiking cycle without becoming Trump’s next Powell.
BY GIVING OUT THIS 9-0 VOTE, WARSH ALREADY GAVE HIS ANSWER.
QUIET AND LOUD, WITH STRENGTH.
HE IS FED CHAIRMAN, NOT TRUMP’S GUY.
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