President Donald Trump has sharply escalated his confrontation with the Federal Reserve, telling a reporter on October 7 that the central bank’s board “would like to see the country do badly” as borrowing costs for American households climb.
The remark came in response to a question about mortgage rates. The 30-year mortgage rate last week hit its highest point in almost three years, adding to the financial strain on homebuyers in an already frozen housing market. Trump called Fed Chairman Kevin Warsh “great” but aimed his criticism squarely at the rest of the board, saying rates should be coming down.
U.S. Treasury Secretary Scott Bessent, who appeared alongside Trump in the Oval Office, said inflation remained elevated because of the energy shock tied to the Iran conflict. “Once we get on the other side of this Iran conflict, the energy market is going to be well supplied, and we will move down towards the Fed’s target and mortgage rates and the 10-year will come back down,” Bessent said, according to reports.
The comments followed a Time Magazine interview published October 1 in which Trump said Warsh should have voted against the Fed’s decision last month to raise interest rates by a quarter percentage point. “I don’t blame Kevin Warsh. I probably would have voted against the board if I were him,” Trump said in the interview, though he insisted he retains confidence in his hand-picked chair.
The September hike — the first in three years, lifting the benchmark to a range of 3.75 to 4 percent on a unanimous vote — penciled in a further increase later this year. For his part, Warsh has defended the move, telling reporters the decision “was the right decision” to deliver price stability. With midterms weeks away and mortgages at multi-year highs, the White House’s pressure on the central bank shows no sign of easing.
