WASHINGTON — President Donald Trump said U.S. interest rates should be 1% or less, speaking hours after the Federal Reserve raised its target range to 3.75%–4.00% in the first hike since 2023.
The comment puts the White House and the Fed at least 275 basis points apart on where policy should sit. Mortgage rates, credit cards, and business borrowing already reflect the higher path, and Trump’s call renews pressure on an institution that is formally independent.
What the Fed did
Officials lifted the federal funds rate by a quarter point to a range of 3.75% to 4.00%, citing inflation that remains above target. Markets had largely priced the move; attention quickly shifted to the outlook for further tightening.
BREAKING: President Trump says U.S. interest rates should be 1% or less, just hours after the Fed raised its target range to 3.75%–4.00%.
— Times of Trading (@timesoftrading) September 17, 2026
Why it matters for Americans
A 1% policy rate would be far below current inflation and market pricing. Economists warn that cutting that aggressively without a sharp slowdown could reheat prices. Households, however, feel high rates through housing and auto loans, which is why the political argument resonates in a midterm year.
Investors will watch whether the rhetoric stays verbal or turns into personnel and legislative pressure on the Fed.
