Trump’s Fed nightmare: Rates won’t be slashed. They could surge now

November 11, 2026 — 10:59am

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If Donald Trump expects Kevin Warsh, his hand-picked chair of the US Federal Reserve Board, to deliver the interest rate cuts that he has continuously clamoured for, he is about to be disappointed. Again.

It now appears inevitable that the Fed will deliver its second rate rise in this cycle – the first was in September – after the US inflation rate came in above expectations for the third successive month.

The only question – and just raising it will upset Trump – is whether the US central bank hikes its policy rate by 25 basis points or 50 basis points when it meets again next month.

The US Bureau of Labor Statistics said on Tuesday that consumer prices rose 0.4 per cent in October. While calculations are muddied by the fact that a government shutdown meant there was no data collected in October last year, most calculations put the annual inflation rate at 4 per cent.

Even if energy and food costs are excluded to remove the direct effects of the war in the Middle East on oil and fuel costs, “core” inflation in October was 0.3 per cent and the annual core inflation rate 2.8 per cent – well above the Fed’s target of 2 per cent.

Moreover, inflation is spreading across the US economy, thanks to Trump’s tariffs and the indirect effects of the higher oil and refined product prices on transport costs that are now feeding into goods and services prices.

The only question – and just raising it will upset Trump – is whether the US central bank hikes its policy rate by 25 basis points or 50 basis points when it meets again next month.

Fed officials are already preparing the ground for more than one rate hike.

Fed governor Christopher Waller (a Trump appointee) told an audience in London on Tuesday that, should the inflation rate for the month come in above 0.3 per cent, a half-percentage point (50 basis point) rate rise........

© Brisbane Times