"The Fed’s Mouthpiece": Trump and the Fed Call a Temporary Truce, Waller May Face Greater Pressure at Next Rate Hike

TechFlow reported that on September 18, "Fed Whisperer" Nick Timiraos stated that while Trump has consistently criticized the Federal Reserve for maintaining interest rates at excessively high levels, he claimed after the Fed's rate increase this week that he had already endorsed the decision during a phone call with Fed Chair Waller several days prior.

According to sources familiar with the matter, Trump's call with Waller came as a surprise to many of the president's close advisors. This "truce" clearly indicates that Waller has temporarily alleviated the tense relationship in which the White House previously viewed the Fed as an adversary. The risk is that this dynamic may only hold until the Federal Reserve raises rates again.

A senior government official noted that if the Fed decides to hike rates again in October (on the eve of the midterm elections), Waller could find himself under stricter scrutiny from Trump and his advisors. Trump's description of a hostile Fed board may lead investors to question whether Waller is truly leading the Federal Reserve or if he is being dragged along by it.(Jin10)