The Fed just threw a wrench in Trump's midterm economic message

With the midterms looming, President Donald Trump wants lower interest rates to ease the squeeze on American families.

Instead, the Federal Reserve raised rates on Wednesday.

The decision is aimed at combating stubborn inflation, but it will make borrowing more expensive for voters and delivers a big hit to Trump's economic promises with less than two months until Americans cast their ballots and determine which party will control Congress.

The Fed does not set the prices of groceries, cars or homes.

But its decisions affect how much Americans pay to borrow money, especially when they buy a house or car.

Higher rates can add hundreds of dollars to monthly payments, even when the price of the home or vehicle has not changed.

ONE LITTLE-KNOWN MEETING HELPS DECIDE WHAT AMERICANS CAN AFFORD — AND WHAT THEY CAN’T The Federal Open Market Committee, or FOMC, raised the federal funds rate by a quarter of a percentage point Wednesday, bringing it to a range of 3.75% to 4%.

The increase — the Fed’s first in three years — was aimed at slowing inflation, which remains above the central bank’s 2% goal.

Higher energy prices and tariffs have added to pressure on household budgets, and the Fed’s projections indicate that another rate increase could come later this year if inflation remains elevated.

The rate hike puts Kevin Warsh , Trump’s pick to lead the world’s most powerful central bank, at odds with the president’s push for lower borrowing costs.

The decision could strain their relationship and revive memories of Trump’s repeated clashes with former Fed Chair Jerome Powell.

TRUMP DANGLES $5,000 CHECKS AS DEBT SURGES — BUT ONLY IF GOP CAN CLEAR MAJOR MIDTERM HURDLE Although the president appoints members of the Fed’s Board of Governors, the FOMC is designed to make rate decisions based on economic conditions rather than political pressure.

Warsh underscored that independence Wednesday, saying the Fed acted based on its assessment of employment, the strength of the economy and the inflation outlook.

WARSH FACES FIRST BIG TEST ON CAPITOL HILL AS TRUMP’S FED VISION COMES INTO FOCUS The Fed chairman was later asked what message he had for Trump, who has repeatedly called for lower rates.