Treasury Secretary Scott Bessent faced questions about inflation and affordability during a Thursday hearing before the Senate, as Democrats work to blame the Trump administration for the dissatisfaction felt by households.
Bessent appeared before the Senate Committee on Banking, Housing, and Urban Affairs, where he presented the Financial Stability Oversight Council’s 2025 Annual Report. Democrats on the panel used the opportunity to push Bessent on cost-of-living-related issues.
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Ranking member Elizabeth Warren (D-MA) pointed out that President Donald Trump ran in 2024 on lowering prices on Day One.
“One year in, affordability is the top concern for Americans across the country,” she said. “Donald Trump has called affordability, I want to get this right, a ‘hoax.’ He’s called it a ‘scam.’ He’s called it a ‘con job.’”
Bessent said that what Trump meant is that the media is fraudulently putting the onus for inflation on the Trump administration, rather than the Biden administration.
“So there is an affordability crisis, and you were front and center in it,” he retorted.
Warren then began drilling Bessent on whether grocery prices had dropped in 2025. He responded that “numerous” grocery prices have gone down, but Warren pointed out that overall grocery prices rose 2.4% last year, above the 2% level that the Federal Reserve considers healthy.
“If you’re just going to insult people by denying the facts that are out there and tell people they’re doing great when they’re struggling, I think there’s just another way to say you don’t have a plan to bring down these prices,” she said.
Inflation and cost-of-living concerns are still weighing heavily on consumers, who have been grappling with the cumulative effects of years of too-high inflation, which began spiking during the COVID-19 pandemic recovery under former President Joe Biden.
During the hearing, Bessent placed the blame for the current situation with inflation at Biden’s feet and pointed out that there have been declines in inflation under the Trump administration. He noted how much the most closely watched inflation gauge, the consumer price index, increased under Trump’s predecessor.
“During Joe Biden’s tenure, CPI was 4.7% in an annualized basis, cumulative CPI was 21.5%, there was a loss of real purchasing power for working families,” Bessent said. “Thus far, we’ve seen an increase in real wages, CPI for 2025 was 2.7% and we have seen it fall for the past three months to 2.1%.”
During the hearing, Sen. Chris Van Hollen (D-MD) accused Bessent of “cherry picking” numbers when it comes to inflation and whether tariffs cause inflation. Trump’s aggressive tariff agenda has been widely criticized by Democrats and some Republicans and has been blamed for higher prices.
Van Hollen also focused on housing prices. “I just want to point out for the record that the National Association of Home Builders said … that costs are up. Construction costs account for about 65% of average home prices in 2024,” he said.
Bessent pointed out that the figure was from 2024, which is when Biden was president. During the hearing, Bessent also made the argument that the Trump administration’s removal of illegal immigrants can reduce demand and take some pressure off of rent prices for cash-strapped consumers.
Another topic of conversation at the Thursday hearing was the Fed and its chairman, Jerome Powell, who is facing an investigation by the Justice Department over testimony he gave before the Senate banking committee about cost overruns for the central bank’s headquarters renovations. Powell accused Trump of using the matter to pressure the Fed to lower interest rates.
Powell’s term is up in May, and Trump has nominated former Fed governor Kevin Warsh to replace him.
Retiring Sen. Thom Tillis (R-NC), a member of the Senate Banking, Housing, and Urban Affairs Committee, has threatened to block any of Trump’s Fed nominees until the legal matter involving Powell has concluded. He reiterated that it still holds true after Warsh’s nomination.
During Bessent’s hearing, Tillis noted that even the chairman of the committee, Sen. Tim Scott (R-SC), has said that he doesn’t think that Powell committed a crime during his testimony.
Tillis argued that the investigation could lead government officials to be less forthcoming because they may fear similar investigations.
“They’re going to be flanked with attorneys, and anytime that they think that they’re in the middle of a perjury trap, they’re probably just going to say, ‘I’ll submit it to the record after consultation with my attorneys’ — is that really the way we want oversight to go in the future?” Tillis said.
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Independence of the Fed has emerged as a key concern for some. Warren asked Bessent about a joke Trump made during the annual Alfalfa Club dinner, where he kidded about firing Warsh if he didn’t lower interest rates. She pressed him to commit that Trump would not sue Warsh over interest rate policy.
“That is up to the president,” Bessent responded, before Warren cut in and the two spoke over each other. “It was a joke, and he made a joke about you, too, Sen. Warren; it got a lot of laughs.”