**Trump Criticizes Treasury Secretary Besant Over Hesitation on Interest Rate Cut**
There is growing analysis that the U.S. Federal Reserve (Fed) is experiencing division due to President Donald Trump’s persistent demands for interest rate cuts since he took office. Trump, after appointing his confidants to the Fed’s Board of Governors, has been vocal in advocating for a rate decrease while publicly criticizing his close aide who is not in favor of such cuts. The Fed now faces an intense dilemma ahead of next month’s decision on potential interest rate cuts.
According to the minutes of last month’s Federal Open Market Committee (FOMC) meeting, released on the 19th, most Fed members advocated for maintaining the current interest rate. Jeffrey Schmidtkamp, President of the Federal Reserve Bank of Kansas City, argued against a rate cut, stating that the risk from inflation is a greater concern than relaxing the labor market. Similar views were expressed by Lorie Logan, President of the Dallas Fed, and Kristine Hamachek, President of the Cleveland Fed. The minutes noted that many participants believed it would be prudent to maintain the current interest rate for the remainder of the year based on their economic outlook.
However, Trump ally Fed governors argued that economic conditions necessitate a rate cut. Stephen Miran, appointed by Trump in September, advocated for a “big cut” of 0.5 percentage points, while Christopher Waller, appointed during Trump’s first term in 2020, called for a 0.25-point cut. The minutes also reported that several participants thought a rate cut in December would be appropriate if economic conditions aligned with their projections, illustrating substantial differences of opinion within the Fed regarding future policy decisions. According to U.S. media such as WSJ, officially confirming “strongly differing views” within the Fed shows increasing division over monetary policy.
Amidst this, President Trump publicly expressed for the first time his dissatisfaction with Treasury Secretary Scott Besant’s reluctance to lower interest rates. During a speech at the U.S.-Saudi Investment Conference at the Kennedy Center in Washington on the 19th, Trump hinted at the possibility of firing Besant if the Fed fails to lower rates. He joked, “Scott is doing well, but he’s making a mistake by keeping interest rates too high. Scott, if you don’t fix this quickly, I’ll fire you.” He further noted that although Besant played the “voice of reason” in preventing Fed Chair Jerome Powell’s firing, Commerce Secretary Howard Lutnick was more in favor of the dismissal, stating, “I side with Howard, but Scott’s points are valid.”
This was the first acknowledgment from Trump that Besant had persuaded him to retain Powell’s tenure. CNN, citing a financial expert, commented, “Besant is regarded as a balanced voice of reason in the Trump administration. Trump’s confrontation with him is not a good signal for the market.”