Treasury Secretary Scott Bessent and Federal Housing Finance Agency chief Bill Pulte. – Getty Images\/Shutterstock <\/p>\n
It gives new meaning to the term economic meltdown.<\/p>\n
Reports that fists almost flew<\/a> between two members of President Donald Trump\u2019s crack finance team are hardly reassuring with the economy perched on the precipice of a jobs slump<\/a> and a possible deeper slowdown<\/a>.<\/p>\n But the story that Treasury Secretary Scott Bessent<\/a> threatened to punch Federal Housing Finance Agency chief Bill Pulte<\/a> in the face at an exclusive MAGA club last week is a sensational morsel of Beltway gossip.<\/p>\n The spur for the near-fisticuffs was Bessent\u2019s belief that Pulte had bad-mouthed him to the big boss, two sources familiar with the evening told CNN. The White House declined to comment. CNN has reached out to the offices of the alleged potential pugilists.<\/p>\n Bessent\u2019s combativeness \u2014 he allegedly told Pulte he wanted to \u201ctake the matter outside\u201d \u2014 might draw quips about the first Treasury Secretary Alexander Hamilton and the most notorious duel in American history.<\/p>\n But it offers two worrying insights into tensions inside Trump\u2019s brain trust at a pivotal moment.<\/p>\n First, the supposed showdown, first reported by Politico, lifts the lid on Trump\u2019s nest-of-vipers political operation. Trump\u2019s second administration has lagged the vicious infighting of his first, since he\u2019s jettisoned anyone who saw themselves as an \u201cadult in the room.\u201d But the Bessent-Pulte bureaucratic cage match shows that Trump\u2019s eight cacophonous months back in power are taking a toll.<\/p>\n Most presidents would recoil in horror at reports of senior aides on the verge of a brawl. Former President Barack Obama used to talk of his Lincoln-style team of rivals. But it\u2019s hard to imagine his cerebral Treasury Secretary Timothy Geithner throwing down the gauntlet to a Cabinet colleague during the Great Recession in 2009.<\/p>\n Trump, being Trump, might welcome the friction, seeing in it a chance to play his warring lieutenants against one another to his advantage.<\/p>\n But there\u2019s a graver reason why a cocktail hour brouhaha in Georgetown will send alarm bells around the world.<\/p>\n The alleged shouting match reveals there\u2019s only one currency in MAGA world: uber loyalty to Trump. Bessent was apparently furious because he thought his colleague had been talking about him with Trump behind his back. The Treasury secretary has emerged as an impressive inside player in the bruising Washington game and knows that his capacity to do his job \u2014 calming the markets, shaping the president\u2019s wildest instincts and stabilizing the global economy \u2014 requires Trump\u2019s absolute confidence. Once Trump turns against someone, it\u2019s a tough road back. If Bessent starts to sense he\u2019s on the outs, investors might panic.<\/p>\n It\u2019s obvious that the first duty of Trump\u2019s officials is to cater to his self-image of greatness rather than to the public. Hence the fawning North Korea-style genuflections that Trump requires in Cabinet meetings.<\/p>\n But flattery exacts a price. Trump\u2019s team must tell him what he wants to hear \u2014 not what he should hear. Such self-censoring is always dangerous for presidents, who live inside bubbles of deference even in normal times.<\/p>\n It\u2019s even more hazardous under Trump, since the president is embarked on the riskiest, most unorthodox economic experiment in generations. His tariff wars<\/a> have ripped up a global trading system that made the US the world\u2019s mightiest economic power. Now, Trump wants to crush another cornerstone of US financial superiority: the independence of the Federal Reserve<\/a>.<\/p>\n He\u2019s not just pursuing another long-term obsession \u2014 scything interest rates. He could also get his hands on the Fed\u2019s other levers, like regulating banks and bailouts, in a way that could profit him and his rich friends in the event of a major financial shock.<\/p>\n Pulte\u2019s clash with Bessent, meanwhile, will only thicken intrigue about his growing behind-the-scenes role. He\u2019s recently emerged as a key player since his agency has been unearthing alleged irregularities on mortgage forms filed by some of the president\u2019s top targets, including Lisa Cook<\/a>, whom Trump is trying to fire as a Fed governor.<\/p>\n Internecine feuding may be another distraction from what Americans care about most.<\/p>\n News of tensions inside Trump\u2019s top team emerged days after a grim jobs report<\/a> suggested that Trump\u2019s outlandish economic approach is beginning to cause damage. The report, released on Friday, showed the economy added only 22,000 positions last month. The data showed the consumer goods sector is now suffering from rising prices brought on by tariffs, the volatile way they are being imposed and the resulting slowdown in hiring. The employment rates among Black Americans and young people, often harbingers, are worsening fast.<\/p>\n But Trump\u2019s officials cannot break any of this down in public to avoid angering the president. A month after their boss fired the head of the Bureau of Labor Statistics<\/a>, his top aides are still claiming that the numbers are off.<\/p>\n On recent TV talk shows, Bessent warned that August was the \u201cnoisiest\u201d month for employment numbers. National Economic Council Director Kevin Hassett warned of \u201cdissonance\u201d in the data. Commerce Secretary Howard Lutnick, chief cheerleader for Trump\u2019s elusive golden age, said on CNBC: \u201cWait until a year from today. Wow, it will be amazing numbers.\u201d<\/p>\n Here\u2019s hoping they are right. Maybe Trump\u2019s irregular approach will reap dividends with jobs returning home and a manufacturing boom. Perhaps lower interest rates will boost growth. And the US economy has previously made fools of those who\u2019ve bet against its resilience.<\/p>\n But that would require almost everything most people know about the economy to be wrong.<\/p>\n There was a worrying moment on NBC\u2019s \u201cMeet The Press\u201d on Sunday. Bessent made a claim that was hard to take at face value from such a serious figure. He refused to agree with what almost every credible economist believes \u2014 that tariffs are an effective tax on consumers. \u201cNo, I don\u2019t,\u201d Bessent said. He also claimed that investment banking behemoth Goldman Sachs<\/a>, which calculated that most tariffs were being paid by the US consumer, was not a credible source. (Bessent has previously argued the idea of tariff-based inflation is \u201cthe dog that didn\u2019t bark.\u201d)<\/p>\n Any other answer would have busted his relationship with Trump and offered new ammunition to alleged adversaries inside the administration like Pulte.<\/p>\n But voters, a plurality of whom turned to Trump in the 2024 election in the hope that he\u2019d alleviate the high anxiety of punishing prices for groceries and housing, are watching.<\/p>\n While Trump is bolstering his appeal to his base by threatening to send troops<\/a> into Chicago and cranking up the pace of his mass deportation drive, most Americans want him to do something else \u2014 fix the economy. A CBS News poll<\/a> published last week showed that just 36% of voters think the economy is good. Some 64% think prices have been going up in recent weeks and 56% think the economy is getting worse. In a new NBC News survey<\/a>, Trump\u2019s approval is weakening on vital economic issues. Only 39% approve of his handling of inflation and 41% back his handling of trade and tariffs. He\u2019s down to his most loyal base on the economy and has pushed away independents and more moderate crossover voters who helped send him back to the White House.<\/p>\n Cardiff Garcia, the editorial director of the Economic Innovation Group, a bipartisan public policy organization, told CNN\u2019s Audie Cornish on Monday that workers were becoming more pessimistic about the economy and Trump\u2019s tariff strategy.<\/p>\n \u201cThey\u2019re most worried about the same things that they actually were worried about during the Biden administration, which is the cost of basic goods and services and the cost of housing. They really wish that the administration and the Congress would focus on that instead,\u201d he said. \u201cTariffs actually ranked dead last as what workers think that the president should be prioritizing right now.\u201d<\/p>\n The economy is on a knife\u2019s edge. The data is turning bad. And two top members of the president\u2019s team almost came to blows.<\/p>\n No wonder the country is worried.<\/p>\n President Donald Trump holds a cabinet meeting at the White House in Washington, DC, on August 26. – Aaron Schwartz\/CNP\/Bloomberg\/Getty Images <\/p>\n
Job seekers wait in line to enter a job fair event in Silver Spring, Maryland, on April 16, 2025. – Roberto Schmidt\/AFP\/Getty Images <\/p>\n