DOMINANT ANGLE
Berlin is particularly taking note of the demonstration of independence by Kevin Warsh, the Fed president appointed by Donald Trump himself, who raised rates against the explicit will of his political patron.
Dominant angle identified — does not reflect unanimity of this country’s media
KEY POINTS
- 01
The Fed raised its benchmark rate by a quarter point to 3.75-4.00%, the first hike since mid-2023, decided unanimously by voting members (FAZ)
- 02
Twelve of the eighteen Fed officials anticipate another rate hike this year, four are even expecting two (FAZ)
- 03
The Dow Jones plummeted 1.2% to 51,462 points after Kevin Warsh's press conference, while the S&P 500 lost 0.4% (Handelsblatt)
ANALYSIS
Berlin, September 17, 2026. The German economic press first notes the demonstration of independence by Kevin Warsh, the Federal Reserve president appointed by Donald Trump himself, who dared to raise the key interest rates against the explicit will of his political patron. On Wednesday evening, the Fed raised its interest rate range to 3.75-4.00%, a quarter of a point more, the first increase since mid-2023. The decision was made unanimously by the voting members, emphasizes the FAZ, which speaks of a risky bet by Warsh "in the lion's den". The committee expects further rate hikes: twelve of the eighteen officials anticipate another increase this year, four are even expecting two, according to the projections cited by the Frankfurt daily.
For Tagesschau, the decision "shows independence from Trump": the American president had multiplied the pressure to obtain a rate cut in the midst of inflation, contrary to the economic doctrine in force during periods of high inflation. Asset manager Eckhard Schulte, from MainSky Asset Management, sums up the atmosphere in Washington with a phrase: "Trump wird toben" - Trump will explode with anger - particularly because the US Treasury has multiplied short-term debt emissions, which are more sensitive to the key interest rate.
On the markets, the sanction was immediate: the Dow Jones lost 1.2%, to 51,462 points, after Warsh's press conference, while the S&P 500 gave up 0.4% and the Nasdaq remained almost stable. The American inflation remains the real reason for the increase: prices rose by 3.4% over one year in August, underlying inflation by 2.4%, still above the Fed's 2% target for five years.
Another paradox highlighted by Tagesschau: despite the rate hike, the dollar is not strengthening much. Stephan Kemper, chief strategist at BNP Paribas Wealth Management, explains this by a conflict of forces: "in the short term, higher rates support the currency, but in the long term, high public debt, deficits, and doubts about monetary credibility are holding it back." In Germany, the issue is also linked to oil: even before the announcement, Chancellor Friedrich Merz had promised measures to alleviate prices at the pump, inflated by the war in Iran, while the DAX was hoping to open with a slight increase.
SOURCES (3)
- FAZMEDIUM
- HandelsblattMEDIUM
