Trump and Bessent Play Good Cop, Bad Cop? Fed’s Doves and Hawks Clash Amid Rising Tensions

TradingKey - Ahead of the Federal Reserve’s interest rate decision, U.S. officials and policymakers have been increasingly vocal about their stance on monetary policy — revealing a deepening divide between political pressure and central bank independence.

On Wednesday, former President Donald Trump took to Truth Social once again to pressure Fed Chair Jerome Powell:“'Too Late' MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!””Trump has repeatedly called for rate cuts, but this latest message comes at a sensitive moment: with recent economic data showing strength, the Fed is leaning toward holding rates steady. Trump’s demand runs counter to that emerging consensus.

[Federal Funds Rate Probabilities Ahead of FOMC Meeting, source: CME Group]

Meanwhile, market analysts anticipate that Fed Governors Christopher Waller and Michelle Bowman may cast dissenting votes at this meeting — a relatively rare occurrence.

Earlier this month, Waller delivered a speech titled “The Case for Cutting Soon,” arguing that with inflation nearing the Fed’s 2% target and upside risks limited, “we should not wait for the labor market to weaken before lowering the policy rate.”

At the end of last month, Vice Chair for Supervision Michelle Bowman also signaled openness to a rate cut as early as the July meeting, stating she would support easing if inflationary pressures remain contained.

In the final hours before the decision, U.S. Treasury Secretary Scott Bessent added his voice, saying: “The Fed is wrong on the tariff-inflation issue,” and urging the central bank to show “a bit of imagination” — a veiled call to look beyond raw data and consider the broader economic picture. He also noted he does not expect a rate cut today.

On the other hand, Kevin Hassett, Director of the White House National Economic Council, emphasized that strong GDP data confirms solid growth. He said the Fed is “highly data-dependent” and expects it will “catch up soon” on rate cuts. Hassett also stressed that the White House “100% respects the Fed’s independence” — a statement that underscores the administration’s delicate balancing act between influence and restraint.

The divergent messages — from Trump’s public demands to Bessent’s subtle critique and Hassett’s measured optimism — reflect a growing tension between political urgency and central bank caution. As the Fed prepares to hold rates steady, the stage is set for an escalating clash between market expectations, economic data, and political pressure.