Surprise as Trump finally blows Wall Street's trust: report

President Donald Trump departs after speaking about the Iran war from the Cross Hall of the White House on Wednesday, April 1, 2026, in Washington. Alex Brandon Pool via REUTERS

President Donald Trump's ongoing war on the Federal Reserve has been so persistent, it has started negatively impacting the economy. Now the economic editor of a conservative website is warning that Trump's economic policies are so erratic, two officials who otherwise were regarded as reliable are being met with unease on Wall Street.

"Within days of Mr. Bessent’s confirmation, at least, it was obvious this was a misjudgment," The Bulwark's economics editor Catherine Rampell wrote for The New York Times on Thursday. "One of his earliest actions as secretary was giving DOGE access to the sensitive Treasury payments system, which disburses some $6 trillion in payments annually. This was supposedly to investigate “fraud,” but it also was an attempt to help the Trump administration unilaterally freeze payments required by Congress. (A federal judge restricted DOGE’s access before this happened.)"

She added, "Soon after, Mr. Bessent also allowed the I.R.S. to share confidential tax data with immigration enforcement — undermining decades of work to convince immigrants that if they paid their taxes honestly, the payments wouldn’t be weaponized against them. (Federal judges have blocked that, too.)"

Rampell continued, "Now, after criticizing his predecessor for allegedly trying to juice the economy ahead of an election, Mr. Bessent appears to have attempted exactly that. Last week, he announced that the U.S. Treasury would ramp up repurchases of its long-term government bonds, a move intended to reduce their interest rates (which could in turn reduce the cost of mortgages and other financial products). Midterms are looming, and looser money tends to make for happier voters. Mr. Bessent’s plan backfired. Instead, after a brief dip, bond rates rose."

In short, the market realized that Bessent's plan would do nothing to address rising inflation, the dangerous national debt and the ongoing economic problems posed by AI.

"If anything, Mr. Bessent’s buyback play (announced along with comments insisting we can grow out way out of debt) only deepened those suspicions. It made Treasury leadership look feckless," Rampell wrote. She had similar reporting on how the markets are responding to Trump's Federal Reserve pick, Kevin Warsh.

"Mr. Warsh, like Mr. Bessent, has had a wobbly start to his tenure," Rampell wrote. "His most recent news conference was something of a disaster; Mr. Warsh either would not or could not articulate what the Fed’s plan was for tackling inflation, or why that plan did not appear to include interest rate increases. (Mr. Trump is demanding rates be lowered.) At one point Mr. Warsh seemed to suggest the Fed might switch its main yardstick for measuring inflation, raising concerns about backdoor attempts to soften the central bank’s commitment to reducing inflation."

She continued, "To make matters worse, Mr. Trump himself weighed in. He insisted that Mr. Warsh really truly wanted to reduce interest rates, but couldn’t because 'he’s got a board, and it’s a political board.' Days later Mr. Trump renewed his efforts to fire one of the members of that Fed board, which the Supreme Court had prevented him from doing. Markets were not happy about any of this."

Rampell is not alone in her assessment of Warsh. Speaking with AlterNet earlier this week, an economic adviser to Presidents Bill Clinton and Barack Obama broke down the problems with Warsh.

"My own guess is that he'll wait until right before or right after the election to raise rates, because he doesn't set policy alone — interest rate policy is made by a committee at the Federal Reserve comprising the seven members of the Board plus five of the regional bank presidents, and there's increasing pressure among them to raise rates," Dr. Robert J. Shapiro explained. "They're letting him put it off a little while longer, but there's no good news on inflation. Just this week, Trump announced 50 percent tariffs on our largest trading partner, Canada, which will further increase inflation. The markets don't have much confidence in Warsh anymore, so they're pricing in a higher-than-normal likelihood that he'll cut rates — even though I don't think he will — and in anticipation of the inflation that would result, they're raising long-term rates."

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