A strong voter backlash to Trump on Tuesday may reduce political pressure on Fed
Chair Kevin Warsh, allowing him to limit political interference and refocus on
controlling inf, several Fed observers say. They argue Republican election
losses and voters’ prioritization of living costs have reshaped the politics
calculus around the Fed. Since his 2024 reelection Trump has repeatedly pressed
the Fed for rate cuts, supported an unprecedented criminal probe into a Fed
building renovation and sought to remove a sitting Fed governor; he appointed
Warsh in May, and Warsh had in turn unexpectedly signaled openness to cutting
rates. New Century Advisors chief economist Claudia Sahm said if the electoral
outcome leads Trump to end the Iran conflict and abandon further tariffs
increases, the Fed may not need to raise rates again.
