The White House criticized the Federal Reserve's decision to raise interest rates, calling the action "regrettable." This stance came after the U.S. central bank set the interest rate in its first hike in over three years.
Details of the Interest Rate Hike
The Federal Reserve decided to raise the interest rate by 25 basis points in a meeting held on September 16, 2026, bringing the target range for the interest rate to between 3.75% and 4%. This increase was due to ongoing pressures from rising inflation and energy costs, marking the first interest rate hike since July 2023.
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White House Position
Kush Desai, the White House spokesperson, stated that the government sees no convincing economic justification for this interest rate hike and noted that in its assessment, the government is not implementing large-scale spending programs like those observed during the Biden administration and the COVID-19 pandemic. For this reason, there is no significant demand pressure that necessitates tightening monetary policy.
The Federal Reserve justified its action by citing high inflation and announced that its goal is to bring inflation back to a 2% level in the long term. The bank's new forecasts indicate that inflation could reach 3.7% by 2026, and the return to the 2% level will be delayed until 2029.
Reactions to the Interest Rate Hike
The government and economic analysts have shown varied reactions to this decision. Some officials and economic experts believe that raising interest rates could help reduce inflation, while others argue that this action may lead to an economic recession. Meanwhile, former U.S. President Donald Trump has also stated that interest rates in the United States should be one percent or less because his country has the best credit rating in the world.
This issue has become one of the hot topics in economic circles, and it seems that, given the rising cost of living and inflationary pressures, its effects on the U.S. economy will become more pronounced.
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