Trump backs 'fantastic' Warsh while blasting other Fed governors as 'very political' ahead of July rate call
President Donald Trump on Monday called on the Federal Reserve to lower interest rates, telling reporters aboard Air Force One that the US "should have the lowest interest rate in the world" — comments that landed on the opening day of the central bank's July meeting.
The remarks arrived two days before the Federal Open Market Committee (FOMC) is set to release its interest rate decision.
While Trump reserved praise for Fed Chair Kevin Warsh — "Kevin's fantastic," he told reporters — he took direct aim at other Board of Governors members, saying they were "very political" and suggesting some "perhaps have bad intentions" in resisting monetary easing.
"Rates should be lowered," Trump said. "This country could be at 8%, 9%, 10%, 12% [annualized growth of] GDP. We should have the lowest interest rate in the world, like it used to be 30 years ago."
The June consumer price index delivered the largest monthly decline in more than six years Tuesday, pulling Treasury yields lower and briefly easing pressure on the Federal Reserve.https://t.co/S0iPtGRbZd
— Mortgage Professional America Magazine (@MPAMagazineUS) July 14, 2026
Brokers waiting on Wednesday's decision
Market expectations diverge sharply from the president's ambitions. According to the CME Group's FedWatch tool, roughly 68.5% of interest rate traders anticipated the FOMC would hold its benchmark federal funds rate at its current 3.5%–3.75% target range, where it has remained for four consecutive meetings in 2026.
The July 28–29 meeting will be the moment markets will begin forming a clearer view of whether he is building consensus or deepening committee divisions. The remaining traders are pricing in a roughly one-in-three chance of a quarter-point hike.
The latest Consumer Price Index (CPI) data gave Trump partial rhetorical ground: prices fell 0.4% month-over-month in June, pulling the annual rate to 3.5% from 4.2% in May, according to Bureau of Labor Statistics figures.
Core inflation eased to 2.6%. But Dallas Fed President Lorie Logan, a voting FOMC member this year, called recently for benchmark rates to be "modestly higher."
Geopolitical drag on mortgage rates
The Fed's posture runs deeper than a single inflation print. Fuel costs remain elevated 15.7% year-over-year, driven by the ongoing Middle East conflict restricting global oil supply — a dynamic examined in depth following the rate hike fears that resurfaced after the June Fed minutes revealed a split committee.
For Melissa Cohn, regional vice president of William Raveis Mortgage and a 44-year industry veteran, the Iran conflict, not Fed rhetoric, is the dominant force driving mortgage rates.
"The Fed's change in communication has not moved bond yields or mortgage rates. Right now, mortgage rates are going to move with oil prices, and oil prices are increasing, so rates will rise as well. Until there is a better resolution with Iran, we are stuck in a higher-for-longer rate environment," she said.
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