Former Treasury Secretary Lawrence Summers warned that President Donald Trump’s preference for the Federal Reserve’s interest-rate setting would trigger a surge in expectations for inflation, driving up long-term borrowing costs.

By Ann Saphir (Reuters) -San Francisco Federal Reserve President Mary Daly reiterated on Thursday it is "reasonable" to expect two interest rate cuts before the end of this year, particularly with the impact of President Donald Trump's tariffs looking more muted than originally expected.

Federal Reserve Chair Jerome Powell defended the bank's $2.5 billion headquarters renovation budget amid feud with Trump over interest rates.

President Trump is pushing for 1% interest rates despite a healthy economy with 4.1% unemployment. The ultra-low rates could devastate savings accounts while creating unpredictable effects on mortgages and investment markets.

A Fed policy rate that low is not typically a sign that the United States is the "hottest" country in the world for investment, as Trump has said. It is usually a crisis response to an economy in serious trouble.

Trump has been highly critical of Jerome Powell this year, pressuring him to cut rates. The Fed Chair has said he's awaiting further clarity on inflation.

US president’s offensive against Jay Powell has prompted swings in the dollar and lifted long-term inflation expectations

Stocks rebounded on Wednesday after President Donald Trump denied reports that he was close to ousting Powell as chairman of the Federal Reserve.