Sen. Elizabeth Warren (D-Mass.) and investor Peter Schiff questioned the Federal Reserve’s independence on Thursday after President Donald Trump told reporters Wednesday that he instructed Fed Chair Kevin Warsh to vote with the rest of the board on the interest rate hike rather than cast a lone dissenting vote

Is Warsh a ‘Sock Puppet’ or did Trump lie?

In a post on X, Warren called Warsh “Trump’s sock puppet Chair” who “got instructions from the President first.”

She argued that the hike is proof that Trump’s economy is struggling, warning that families will now pay more on credit cards and mortgages as a result.

Schiff said Trump’s account amounts to either “a shocking admission or just another lie,” since Trump claimed Warsh would have cast the lone dissenting vote had Trump not told him to vote with the rest of the board instead.

The Fed raised its benchmark rate by 25 basis points Wednesday to a range of 3.75%-4.00%, its first hike since 2023, with all 12 voting members backing the move unanimously.

Read Also: OpenAI Brings GPT-6 Astra to the Legal World With Case Law, But There Are Concerns

Trump Calls The Fed’s Board ‘Very Hostile’ And ‘Very Political

Speaking to reporters Wednesday after the rate decision, Trump described the Fed’s board as “very hostile” and “very political,” saying he told Warsh, “you might as well vote with the board because it’s not going to matter.”

El-Erian Pushes Back on Fed’s Credibility

Economist Mohamed El-Erian told CNBC that the Fed’s unanimous 12-0 vote signals independence.

He added that the 10-year Treasury bond yield and “measures of inflation worries” have not “moved that much over the last few days,” adding that “neither the credibility of the Fed nor inflation worries were the factors behind the surge in yields.”

The 10-year Treasury yield is currently at 4.93%, down from 5.04% on Tuesday, the highest since July 2007.

Price Action: The iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) climbed 0.57% on Thursday at $91.25 and rose 0.01% in after-hours trading, while the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) closed 1.11% higher at $81.78 and fell 0.01% in extended trading.

The iShares 7-10 Year Treasury Bond ETF has a Momentum score in the 25th percentile and a negative price trend across the short, medium, and long-term, according to Benzinga edge rankings.

See More: Top Momentum Stocks

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo Courtesy: Bryan J. Scrafford on Shutterstock.com