Having so far succeeded in convincing President Trump not to fire Federal Reserve Chair Jerome Powell, Treasury Secretary Scott Bessent was told by the president Wednesday that “I’m going to fire your ass” if interest rates don’t come down.
Trump was clearly joking about firing Bessent, who was in the audience for the president’s hour-long monologue at a U.S.-Saudi Investment Forum coinciding with a state visit by Saudi Arabian Crown Prince Mohammed bin Salman.
But Trump’s remarks also demonstrated that he’s aware that mortgage rates and the prices of goods and services will be on the minds of voters in the 2026 midterm elections — and he wasn’t kidding when he said he’d still like to fire Powell, having been talked out of it in July.
Segueing from his thoughts about the price of eggs, Trump complained that “mortgage rates are down, despite the Fed. I mean, Scott, you’ve got to work on this guy,” he said of Powell. “He’s got some real mental problems. There’s something wrong with him. It’s just, I’ll be honest, I’d love to fire his ass.”
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Inman has requested comment from the Federal Reserve, but it generally does not respond to the president’s criticism of Powell. Powell himself has said his decisions are based on economic data and not influenced by politics.
Although the Fed has cut rates twice this year, Powell warned after the last cut that central bank policymakers may be reluctant to cut rates again in December over worries that inflation hasn’t been tamed.
Mortgage rates tracked by Optimal Blue hit a new 2025 low of 6.12 percent on Oct. 28, but have been on the rise again this month over uncertainty about the prospects for a Dec. 10 rate cut.
“The only thing Scott’s blowing it on is the Fed, because the Fed — the rates are too high, Scott,” Trump continued, addressing Bessent. “And if you don’t get it fixed fast, I’m going to fire your ass. Okay?”
Earlier in his monologue, Trump claimed that his administration is “making incredible strides to make America affordable. That’s a new word that [Democrats are] using — affordability.”
A PBS News/NPR/Marist poll released Wednesday showed that if the 2026 midterm elections were held today, Democrats would have a 14-point lead over Republicans — the first time in more than three years Democrats have had a significant advantage on the “generic ballot” question.
The poll showed Trump’s approval rating slipping to 39 percent in November, down from 41 percent in September, with 57 percent saying the administration’s top priority should be lowering prices.
Democrats “had the worst inflation in history,” Trump claimed. “They had the highest prices in history. The country was going to hell.”
Trump said core inflation has dropped to 2.7 percent, and repeated a claim he made on Nov. 5 on Truth Social that Walmart’s curated Thanksgiving dinner basket is 25 percent cheaper than last year.
Core inflation, as measured by the Fed’s preferred metric — the Personal Consumption Expenditures (PCE) index — rose to 2.9 percent in August, up from 2.6 percent in April when the Trump administration announced tariffs that have been blamed for some price increases.
Walmart’s Thanksgiving dinner basket is cheaper this year in part because it includes fewer food products, according to a detailed analysis by The Annenberg Public Policy Center’s FactCheck.org. After adjusting for those and other factors, Walmart’s Thanksgiving dinner basket is cheaper, but by only 6.5 percent, the analysis concluded.
But Trump’s hopes that installing allies on the Federal Reserve’s rate-setting committee will bring mortgage rates down could backfire if investors in mortgage-backed securities that fund most home loans aren’t convinced inflation is actually tamed.
Trump ally Stephen Miran, who replaced Biden appointee Adriana Kugler on the Federal Reserve Board in September, has cast the lone vote for a jumbo 1/2 percentage-point rate cut at each of the Fed’s last two meetings.
With Atlanta Fed President Raphael Bostic set to retire in February and Trump attempting to remove Federal Reserve Governor Lisa Cook from her position, there’s speculation that the Trump administration will take the unprecedented step of trying to influence the appointments of regional bank presidents.
The Fed cut, and mortgage rates went up
When the Fed approved three rate cuts totaling a full percentage point at the end of 2024, mortgage rates went up by an equal amount as inflation began trending up again.
Trump backed down in July from a campaign aimed at pressuring Powell to lower rates or resign.
Administration officials, led by Federal Housing Finance Agency Director Bill Pulte, attempted to make an issue out of a multibillion-dollar renovation of the Fed’s Washington, D.C., headquarters, claiming that Powell mismanaged the project and lied to Congress about it.
The campaign petered out after Fed detailed reasons for the rising costs of the project and rebutted suggestions that it had broken the law or that Powell lied to Congress, and outside lawyers and The Wall Street Journal’s editorial board urged Trump not to fire Powell.
The Journal called the cost overruns of the renovation a “silly pretext” for firing Powell, and noted that bond markets reacted badly to reports that Trump had drafted a letter firing Powell.
It was Pulte who persuaded Trump to float the idea of 50-year mortgages to ease the pain of elevated home prices and mortgage rates — infuriating some administration officials when the proposal was not well received, Politico reported.
Pulte walked into Mar-a-Lago on Nov. 8 with a posterboard in hand that Trump posted to Truth Social 10 minutes later, an anonymous source who was with the president told Politico.
“The episode underscores the haphazard ways consequential policies are sometimes brought before the president, and how Trump’s govern-by-whim nature can backfire,” Politico concluded.
Trump has used Pulte’s criminal referral of Cook to the Department of Justice for alleged mortgage fraud as justification for removing her from the Federal Reserve Board, a case that’s already landed in the Supreme Court.
Pulte proposed in July that Fannie Mae and Freddie Mac be allowed to accept the more inclusive VantageScore 4.0 to qualify more borrowers, an idea that caught lenders by surprise and has yet to be implemented.
In September, Politico reported that Bessent threatened to punch Pulte in the face because he’d allegedly been talking about him with the president behind his back.
In a Nov. 15 profile, the Journal reported that some Trump administration officials “have grown wary of Pulte’s unorthodox and aggressive tactics” and have pushed for Trump to fire him. But the president has reportedly refused, saying he appreciates Pulte’s loyalty.
Trump touched on the Fed renovation project again Wednesday, saying Powell “should be sued for spending $4 billion to build a little building,” but said Bessent has been “a voice of reason” in persuading him not to fire Powell, whose term as chair ends in May.
“Don’t fire him, he’s got three months to go,” Trump said Bessent has advised him. “I want to get him out, Scott, please.”
Trump said Secretary of Commerce Howard Lutnick is “a little bit more for firing, right Howard? I think Howard would say, ‘Get him the hell out of there.'”
Last month Bessent said he was set to do another round of interviews with five candidates who are on the Trump administration’s short list to replace Powell as Fed chair. Economist Kevin Hassett, a Trump advisor, is thought to be the top candidate.
At the beginning of Wednesday’s monologue, Trump said that he and other members of his administration had thought about installing Bessent as Fed chair, “but he wants no part of it. He likes being Secretary of the Treasury.”
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