Trump reverses course on interest rates while backing Warsh — after months of demanding cuts, he now says raising them ‘is effective’

Amanda SmithFri, April 24, 2026 at 4:35 AM UTC

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Donald Trump holds up a pair of scissor after cutting the ribbon for his his new golf course at his Trump International Golf links resort in Balmedie, Scotland.

A month ago, President Donald Trump was demanding that Federal Reserve Chair Jerome Powell cut interest rates (1).

He was so adamant that he took to Truth Social, with his signature all-caps posts, calling for reductions "IMMEDIATELY" (2). Trump has spent a considerable amount of time advocating for paring back interest rates.

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"We should be paying a much lower interest rate than we are," Trump said during his speech at the World Economic Forum (3). "We should be paying the lowest interest rate of any country in the world."

On April 21, however, Trump's caprice became evident as he backpedaled during an interview for CNBC's Squawk Box (4).

"I've been in favor of interest rate rises to stop inflation," he said. "I think it sort of is effective."

The timing is interesting. It was also the Senate Banking Committee hearing with Kevin Warsh, the president's pick to replace Powell. Trump was asked in a Fox Business interview in mid-April and he replied (5) that if Warsh understands interest rate increases, he does too.

What's the deal with Warsh

During his confirmation hearing, Warsh was repeatedly asked if Trump had tried to get him to promise to cut rates as Fed chair.

"The President never asked me to predetermine, commit, fix, or decide on any interest rate decision, in any of our discussions, nor would I ever agree," he said (6).

Warsh, who is known for being an inflation hawk (someone who elevates the importance of low inflation as their top monetary policy), has focused on Fed independence. Warsh wrote an op-ed (7) in November that underscored low interest rates.

"First, the Fed should discard its forecast of stagflation in the next couple of years, as if subpar growth and inflation 40% above target is the best that can be done," he wrote. "Second, inflation is a choice, and the Fed's track record under Chairman Jerome Powell is one of unwise choices. The Fed should re-examine its great mistakes that led to the great inflation."

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Could Trump have a case of buyer's remorse? He initially voted for Powell (8), but has since soured, threatening to fire their chair (9) if he did not step down.

Read More: Almost 50 with no retirement savings? Here’s why you shouldn’t panic

Experts weigh in

Wenny Cai, the founder of Anchored Finance, is a specialist on macroeconomic trends and how markets are shaped by them. She told Moneywise that Trump's change in tone really highlights how quickly the narrative can shift when the numbers roll in.

"After months of calling for cuts, acknowledging that higher rates are actually working suggests a growing acceptance that the economy needed cooling," she said. "For markets, this kind of back-and-forth can be a bit unsettling.

"Investors are already dealing with sticky inflation and mixed signals, so inconsistent messaging only adds to the noise. That said, the impact of tighter policy is becoming clearer — demand is slowing, and inflation expectations are starting to stabilize."

But the markets tend to tune out political bias and focus on the intel provided by central banks and collected data.

If an interest rate cut happens, it could make borrowing more attractive, yet savings less lucrative. Expect interest rates to fluctuate, and settle into the financial trenches for the long-term to help achieve your goals.

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

Reuters (1),(6); Yahoo Finance (2); World Economic Forum (3); X (4); The Guardian (5); The Wall Street Journal (7); NPR (8); CNN (9)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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