Trump walkout urges Fed to keep rates low, risks market shifts

President Donald Trump walked out of a televised interview after urging newly confirmed Federal Reserve chair Kevin Warsh not to raise interest rates. Warsh was confirmed by the Senate on May 13 by a 54-45 vote and will chair his first Federal Open Market Committee meeting on June 16-17 with policy rates at 3.50%–3.75%.

On camera Mr. Trump told the interviewer, “There’s no reason to raise interest rates. The country becomes great. We built the country by doing great and having rates low.” He added that growth does not cause inflation, saying, “Growth is the greatest thing you can have and growth does not cause inflation.” He later expressed personal support for Warsh.

The administration cited fresh labor data showing May payrolls rose by 172,000 jobs while the unemployment rate held at 4.3%. Financial markets assign roughly a 96% probability that the Fed will hold rates at the June meeting.

Energy prices have risen since the escalation of the Iran conflict in late February. Brent crude moved from about $72 per barrel to nearly $120 before easing to roughly $94. The national gasoline average is $4.17 per gallon, an increase of $1.16 since the conflict began. Mr. Trump said gasoline prices could fall “if we sign an agreement” to reopen the Strait of Hormuz or “after we finish” any actions he referenced, and he forecast prices could “drop like a rock.”

The FY2027 budget requests $1.5 trillion for defense, the largest single-year total since World War II. Federal budget projections show a $2.06 trillion deficit this fiscal year, rising to $2.17 trillion next year. To finance deficits the Treasury is issuing more than $166 billion in debt per month.

Market participants are monitoring how the Fed’s path, fiscal issuance and energy costs may affect liquidity, real interest rates and asset prices including Bitcoin and equities. The Fed’s June 17 decision will be the first policy outcome since Warsh took office.