The Federal Reserve raised interest rates by a quarter of a point Wednesday, marking the first such increase in three years. The move came in the face of discouraging data on inflation and consumer prices that forced the hand of Fed Chair Kevin Warsh just four months after Donald Trump appointed him.

The developments were not a foregone conclusion. On the one hand, the economic data suggested that inflation was proving stubborn, making higher interest rates a necessity. In fact, MS NOW highlighted a Duke University survey, published earlier this week, which found a nearly unanimous consensus among former Fed officials that a rate hike was necessary.

On the other hand, Trump and his White House team — who were responsible for choosing Warsh in the first place — have launched a heavy-handed lobbying campaign to try to convince the Fed chair to leave the status quo intact despite economic conditions.

If Warsh failed to act, he risked doing lasting harm to global investors’ confidence in the Fed and injecting new turmoil into the bond market. If Warsh raised rates seven weeks before the midterm elections, he risked political backlash from the White House.

On Wednesday afternoon, the Fed chair made the call the president desperately didn’t want him to make.

How and whether Trump will respond remains an open question. Two weeks ago, the president went so far as to threaten to curtail all trade with a wide swath of U.S. partners unless the Fed agreed to slash interest rates, and earlier this week, during a trip to Ireland, he reiterated the same point.

Soon after, Kevin Hassett, the director of the National Economic Council and the top economist on Trump’s team, sent a related signal during a Fox News interview, arguing, “I think if you want an independent Fed, then one thing the Fed does is it stays out of the way of elections.”

Time will tell whether Trump and his team follow through, though if the administration does impose new trade restrictions, it would risk making consumer prices even worse.

This is a developing story. Check back for updates.

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