DOMINANT ANGLE
Paris sees the Fed's rate hike as an institutional showdown between Donald Trump and the man he himself appointed to head the central bank, and highlights the irony of a decision triggered by the president's own wars.
Dominant angle identified — does not reflect unanimity of this country’s media
KEY POINTS
- 01
The Fed raised its target rate by 25 basis points, to a range of 3.75% to 4%, a decision made unanimously on Wednesday, September 16, the first increase since summer 2023
- 02
Donald Trump called for a rate cut "RAPIDLY" to "1%, or less" on Truth Social, accusing the Fed's board of acting for "political reasons"
- 03
The Fed's projections put the rate between 4% and 4.25% by the end of 2026, with retail sales up 1.2% in August, their strongest gain since March
ANALYSIS
Paris, September 17, 2026. On Wednesday, September 16, the US Federal Reserve raised its benchmark interest rate by a quarter of a point, bringing it to between 3.75% and 4%, a first since summer 2023. The decision, made unanimously by the monetary policy committee, was widely anticipated: according to a Reuters poll cited by La Tribune, 85% of economists surveyed expected this move.
The French press first notes the institutional paradox. Kevin Warsh, appointed this year by Donald Trump to steer monetary policy towards greater flexibility, finds himself constrained, after only four months in office, to do the opposite "in the face of alarming inflation figures," notes Le Monde. The new Fed president justified his choice by citing inflation that is "too high, for too long," a 2% target missed for over five years, with consumer prices rising 3.7% over the past year in July according to the PCE index.
Le Monde highlights the irony of the situation: this monetary tightening contradicts Donald Trump, but it is a direct consequence of his two wars, the armed conflict against Iran and the trade offensive against the rest of the world, two factors that fuel the surge in energy prices and inflationary pressure.
The US president was quick to react. On Truth Social, he demanded that interest rates be lowered "RAPIDLY," wanting them to be "1%, or less," and accused the Fed's board of being "hostile" and acting for "political reasons" in order to "harm him as much as possible" — while avoiding, this time, personally attacking Kevin Warsh, unlike his treatment of Jerome Powell.
The Fed warns that another rate hike is likely by the end of the year, with projections placing the rate between 4% and 4.25% in December. Officials believe the economy's resilience is sufficient to withstand it: retail sales rose 1.2% in August, their strongest increase since March, while unemployment remains contained at 4.1% and annual growth is projected at 2.3%. RFI notes that the institution's statement emphasizes a faster return to the 2% target, the independence of the central bank remaining, according to Le Monde, "the first virtue" that the committee intended to demonstrate by voting for this hike unanimously.
SOURCES (4)
- Sud OuestMEDIUM
- La TribuneMEDIUM
