President Trump said he would "love to fire" Powell while placing Bessent in an awkward position to broker lower rates
President Donald Trump intensified his campaign against the Federal Reserve this week, explicitly stating he would "love to fire" Chair Jerome Powell while placing Treasury Secretary Scott Bessent in an awkward position to broker lower rates.
"The only thing Scott is blowing it on is the Fed because the Fed, the rates are too high," Trump said Wednesday at the United States-Saudi Investment Forum in Washington.
"If you don't get it fixed fast, I'm going to fire your ass."
The comments reveal deepening tension between Trump's demands and the Fed increasingly reluctant to cut rates further.
Central bank policymakers are now divided over whether December will bring another reduction, with investors pricing in a 68% probability the Fed holds rates steady.
The Fed's divided house
Fed minutes from October showed that several policymakers prefer to pause cuts, despite the president's repeated calls for aggressive action.
"Many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year," according to the minutes.
Dallas Fed president Lorie Logan stated: "I'd find it difficult to cut rates again in December unless there is clear evidence that inflation will fall faster than expected or that the labor market will cool more rapidly."
The standoff reflects an economy sending conflicting signals. Consumer spending remains robust while unemployment ticked up to 4.4% in September.
Tariffs are pushing some prices higher, though not as dramatically as feared. This ambiguity has fractured Fed consensus, historically a consensus-driven institution.
The restraining voices
Bessent, who is leading the Fed chair search, has privately urged Trump to let Powell complete his term, which ends May 2026. "Please don't fire him. He's got three months to go," Trump said, recounting his Treasury secretary's plea.
Yet Trump's political pressure ultimately may prove irrelevant. The Fed makes decisions based on economic data, not executive demands, and rate cuts require consensus among the policy-setting committee.
Even if Trump installs a loyalist as Fed chair, that person gets only one vote among twelve.
For mortgage professionals, the extended uncertainty signals continued volatility ahead, with policy decisions driven by economic fundamentals rather than political theater.
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