Trump cites India's 8% growth in fresh attack on 'hostile' Fed

President Trump cited India's 8% economic growth as a US benchmark while calling the Federal Reserve "hostile" for keeping interest rates too high.

President Trump called the Federal Reserve "hostile" for restraining economic growth, citing India's 7% to 8% expansion as evidence the US should target far higher output without fear of inflation.

"Growth can be good for inflation, not just bad for inflation," Trump said in a CNBC interview Wednesday, arguing the US should aim for 12% to 13% gross domestic product growth.

The remarks came after stronger-than-expected employment data, which Trump said triggered what he called a "horrible derangement syndrome about inflation" in financial markets. He acknowledged that Fed Chair Kevin Warsh is unlikely to push for lower interest rates in the near term, giving the central bank chief breathing room despite the political pressure.

The confrontation sets up a prolonged standoff between the White House and the Fed, with Trump demanding faster growth while Warsh's board — which the president described as "a bit hostile" — maintains a cautious posture. Markets now face uncertainty over whether political pressure will eventually force a policy shift or entrench the Fed's independence.

Trump's comments mark one of his most direct interventions into monetary policy since returning to office. By publicly setting a 12% to 13% GDP target — more than triple the current pace of US expansion — he is challenging the Fed's mandate to manage inflation without White House interference.

The president contrasted the US approach with India, which has remained one of the world's fastest-growing major economies, with expansion supported by domestic consumption, investment and government-led infrastructure spending. India has attracted increasing global investment as multinational companies diversify supply chains beyond China. Economic ties between the US and India have expanded steadily over the past decade, with growing cooperation in trade, technology, semiconductors, clean energy and defense.

Trump also painted a positive picture of the US economy under his administration, describing the country as being in a "Golden Age" with record factory construction, employment and stock market levels. "The first term was great financially," he said. "This is, I think, blowing it away." He claimed American workers in normal jobs were earning more money than ever before.

Yet the tension with the Fed reveals a fundamental disagreement over economic strategy. Trump argued that financial markets have developed an excessive fear of inflation, where strong data triggers expectations of higher rates rather than confidence in growth. He said he wished he could "flip it the old way" when good news boosted stocks.

Warsh's Balancing Act

Fed Chair Kevin Warsh now faces the challenge of maintaining credibility with both the bond market and a president who views the central bank as an obstacle to growth. Trump acknowledged that Warsh is unlikely to deliver rate cuts soon, suggesting the White House has tempered expectations for near-term monetary easing.

The Fed's next policy meeting is scheduled for late July, with markets pricing a high probability of no change. Any signal from Warsh that he is yielding to political pressure could trigger a selloff in bonds, while maintaining a hawkish stance risks further confrontation with the White House.

The president also renewed his criticism of Fed policymakers, saying they risked slowing economic momentum by keeping interest rates too high. "I really think that I would love to be able to get back... when you announced great numbers, the stock market went up," Trump said, adding that policymakers should encourage economic strength rather than restrain it.

This article is for informational purposes only and does not constitute investment advice.