American central bank keeps interest rates unchanged despite high inflation

The US Central Bank, the Federal Reserve, leaves the interest rate unchanged. However, Chairman Kevin Warsh does not rule out that the interest rate may be further increased soon due to high inflation. Last month, Warsh raised the interest rate for the first time in more than three years. The rate was increased from 3.5 to 3.75 percent to 3.75 to 4 percent to curb inflation in the United States. This remains fluctuating around 4 percent now due to high oil prices. Although the decision to raise the interest rate was not entirely a surprise, President Trump had hoped that he would lower the rate. And even now, Trump hoped for that. Midterms The interest rate decision comes less than a week before the midterms, the midterm elections. A majority in the two Houses of Congress: the House of Representatives and the Senate, is at stake. The Republicans are going all out to maintain their majorities. Last month, Trump called the central bank's board "very hostile" after the announced increase. "They are very political. They are doing the wrong thing. They are a bunch of politicians," he said during a campaign in North Carolina. "They raise the interest rate to make Trump perform as poorly as possible." Clash It is not the first time that Trump has strongly clashed with the Fed. He has come into conflict several times with Warsh's predecessor, Jerome Powell. Trump believes that the US borrowing costs should be the lowest in the world. He regularly publicly expressed this to the Fed this year. He called Powell a "loser," threatened to fire him, and even accused him of fraud. Trump chose Warsh for the Fed chairmanship as his successor this spring after he had regularly spoken out for lower interest rates. "If Kevin is in his place, then the interest rate will go down," Trump said. In Warsh's explanation of the new interest rate decision, he says that politics played no role.