US President Donald Trump has called for lower interest rates after the Federal Reserve raised them for the first time in three years, but he avoided directly criticising central bank chief Kevin Warsh.

"We are 'carrying' almost every country in the World, and that cannot go on any longer. LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!" Trump said on his Truth Social network on Wednesday.

He floated cutting trade ties with countries running surpluses against the US.

"If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year," he wrote.

Trump argued that "the word 'Deficit' is nothing more than a fancy word for LOSS," claiming the US is "'carrying' almost every country in the World."

His reaction came after the Federal Reserve raised interest rates for the first time since 2023, defying President Trump's demand for cuts, as central bank chief Kevin Warsh stressed the need to combat inflation that has been "too high" for "too long."

The Fed's Federal Open Market Committee voted unanimously to raise rates by 25 basis points to between 3.75 and 4.00 percent, saying the rate hike would support a "timelier return" to its two-percent target for inflation.

Midterm elections

Warsh, appointed by Trump, said the decision was a "serious" one, but needed to be taken.

"The plain fact is that inflation is too high, and has been for too long," he told a press conference.

And Wednesday's rate hike may not be the last — the vast majority of Fed policymakers indicated that at least one more rate hike was likely necessary before the end of the year, according to their Summary of Economic Projections.

US households and businesses have been battered by years of higher-than-target inflation, and prices have surged in the wake of Trump's war on Iran, his signature tariff policies and the ongoing AI boom.

Trump has launched an unprecedented assault on the Fed's independence since taking office, attempting to fire a Fed Governor and launching a criminal probe against Warsh's predecessor in his quest for lower rates to spur economic activity.

The president's Republican Party faces a stern test in upcoming midterm elections, with rival Democrats seeking to wrest control of both houses of Congress and economic issues front-and-centre for voters.