Trump Walkout Presses Fed on Rates, Moves Oil and Bitcoin

President Trump left a televised interview after pressing Federal Reserve chair Kevin Warsh to keep interest rates low and arguing that economic growth does not cause inflation. The exchange moved prices in oil markets, Bitcoin and equity futures.

Warsh was confirmed by the Senate on May 13 by a 54-45 vote, the narrowest margin for a Fed chair. He will chair his first Federal Open Market Committee meeting on June 16-17. The federal funds rate is currently set at 3.50% to 3.75%.

Trump urged Warsh not to raise rates, saying, “There’s no reason to raise interest rates.” He rejected the idea that a strong labor market must generate higher prices, declaring, “Growth is the greatest thing you can have and growth does not cause inflation.” He described Warsh as “fantastic” and said he did not want to unduly influence him.

Fresh labor data showed May payrolls increased by 172,000 and the unemployment rate held at 4.3%. Market tools indicate about a 96% probability that the Fed will hold rates at the June meeting.

Oil prices moved sharply after the Iran conflict escalated in late February, with Brent crude rising from roughly $72 a barrel to nearly $120 before easing to about $94. The national average for regular gasoline is about $4.17 per gallon, roughly $1.16 higher since the conflict began. On gasoline, Trump said prices could fall quickly if a deal is reached or after U.S. actions end, and that prices would “drop like a rock” once hostilities abate.

The FY2027 budget requests $1.5 trillion for defense. The Office of Management and Budget projects a federal deficit of $2.06 trillion this fiscal year, rising to $2.17 trillion next year. Current projections imply Treasury net issuance of more than $166 billion per month.

Lower interest rates combined with heavier Treasury issuance increase market liquidity, a variable watched by Bitcoin traders and other risk-asset investors. Persistent high oil prices could raise consumer-price inflation and prompt a tighter monetary response if inflation pressures do not ease.

The June 17 Fed decision and the committee’s statement and forward guidance will provide the first concrete indication of Warsh’s policy approach under presidential attention.