The Fed raises rates unanimously despite the White House’s preference

The Federal Reserve raised interest rates by a quarter of a percentage point in a unanimous decision. Chair Kevin Warsh said the inflation trends he had criticized at Jackson Hole had shown too little improvement to change his assessment.

Markets had assigned a 94% probability to an increase after stronger-than-expected August employment and inflation reports. Investors therefore took the decision largely in stride. Politically, it created a harder moment: President Trump had selected Warsh with an expectation of lower borrowing costs, and the midterm elections are approaching.

White House economic adviser Kevin Hassett had said the administration would respect the process. Republican Senator Bernie Moreno nevertheless criticized the increase, arguing that it would not bring gasoline prices down.

Sixteen of 18 Fed officials projected at least one further increase by year-end. Those projections signal their assessment at this meeting, rather than a binding commitment to the next decision.