President Donald Trump sparked laughter and controversy during his appearance at the U.S.-Saudi Investment Forum on Wednesday when he jokingly threatened to fire Treasury Secretary Scott Bessent over high interest rates.
Trump's Public Pressure on Federal Reserve
In his remarks, Trump directed his frustration toward Federal Reserve Chair Jerome Powell, despite the central bank's political independence. The president lacks legal authority to fire the Federal Reserve chair, yet he repeatedly called for Powell's ouster during the event.
"You've got to work on him, Scott. The only thing Scott's blowing it on is the Fed, because the Fed ― the rates are too high, Scott. And if you don't get it fixed fast, I'm gonna fire your ass, OK?" Trump told the audience, generating laughter from the crowd.
Conflicting Views Within Federal Reserve
Trump revealed that Bessent has been urging him to avoid firing Powell, whose term concludes in May. "Don't fire him. Sir, please don't fire him ― he's got three months to go," Trump mimicked his Treasury Secretary, then complimented Bessent as "the voice of reason."
The tension between Trump and Powell dates back to 2017 when Trump first nominated him as Fed chair. Within months, the president grew openly frustrated with Powell for increasing interest rates, blaming him for stock market declines and unsuccessfully pressuring him to resign.
When President Joe Biden took office, he nominated Powell for a second term that would extend into what could be Trump's second presidency. Meanwhile, minutes from the Fed's October meeting released Wednesday show officials "expressed strongly differing views" about appropriate policy decisions for the remaining months of the year.
Ongoing Federal Reserve Independence Debate
The situation highlights the ongoing tension between the White House and the politically independent Federal Reserve. Trump's comments about Powell turned personal during the forum, with the president stating: "He's got some real mental problems. There's something wrong with him. I'll be honest, I'd love to fire his ass. He should be fired. Guy's grossly incompetent."
Despite Trump's persistent criticism, Bessent has no control over interest rates, as the Federal Reserve operates independently from political influence. The agency sets rates based on inflation and economic growth considerations, not presidential preferences.
