With the U.S. non-farm payroll data for May significantly exceeding expectations, the market is widely anticipating a Federal Reserve interest rate hike, and newly appointed Federal Reserve Chairman Kevin Warsh is about to hold his first policy meeting.

US President Trump's public rejection of the interest rate hike decision stands in stark contrast to mainstream market expectations and institutional assessments, making the policy direction of this interest rate meeting highly uncertain. The Federal Reserve is also caught in a dual struggle between political demands and economic realities.

Trump publicly pressured officials, explicitly opposing interest rate hikes and advocating for rate cuts.

In an interview recorded last Friday (June 5th) and broadcast on Sunday on NBC, Trump commented on the current direction of the Federal Reserve's monetary policy. He stated that while current US economic data is positive, the market is fluctuating due to expectations of interest rate hikes. He argued that the Fed has no reasonable grounds to raise interest rates, that raising rates would be a wrong policy choice, and that the US is better off implementing an interest rate cut policy at this time.



Trump acknowledged that he highly values Warsh's abilities and respects his right to make independent decisions. However, he believes that during a period of steady economic growth, there is no need to suppress the economy by raising interest rates. He added that the United States still carries debt burdens and has several development plans to pursue, including military expansion, and raising interest rates would constrain overall economic development.

Strong employment data release fuels market expectations for interest rate hikes.

Last week, the U.S. Bureau of Labor Statistics released non-farm payroll data for May, which significantly exceeded market expectations. Not only did non-farm payrolls increase by 172,000, but the employment data for the previous two months were also revised upwards. The U.S. unemployment rate remained stable within a reasonable range of 4.3%, fully demonstrating the strong resilience of the labor market.

Strong employment data triggered a chain reaction in the market, with a sell-off in the US Treasury market. Financial trading markets have fully priced in a 25-basis-point rate hike by the Federal Reserve before the end of this year . Goldman Sachs, which had previously predicted a rate cut by the Fed in December 2026, has also urgently adjusted its monetary policy expectations, canceling its prediction of a rate cut this year and postponing the two 25-basis-point rate cuts to June and December 2027.

Multiple pressures intertwine, leaving the Federal Reserve in a policy dilemma.

The Federal Reserve will hold its Federal Open Market Committee (FOMC) meeting on June 16-17, which will be Warsh's first core policy meeting since taking office as Fed chairman, putting him under unprecedented dual pressure.

On the one hand, a booming job market and persistently high inflation levels require the Federal Reserve to tighten monetary policy in order to stabilize prices and prevent the economy from overheating.

On the other hand, Trump's approval rating has been under pressure due to factors such as the situation in the Middle East and high domestic oil prices. His insistence that economic growth can autonomously suppress inflation contradicts the traditional regulatory logic of the Federal Reserve, and he continues to send out demands for looser policies to the Federal Reserve.

Overall , current market fundamentals support interest rate hikes, while strong political opposition has intensified the divergence between bulls and bears.

With economic realities and political demands at odds, the Federal Reserve's policy choices at this meeting have become significantly more difficult, and the subsequent direction of monetary policy will profoundly affect the dollar's trajectory and the global capital market landscape.