Treasury Secretary Scott Bessent has expressed clear frustration with the Justice Department’s unprecedented criminal investigation into Federal Reserve Chair Jerome Powell, telling President Donald Trump that the probe has “made a mess” and could have unintended market consequences. According to multiple reports, Bessent communicated his concerns directly to the president, highlighting how the legal action risks creating unnecessary instability in financial markets and complicating monetary policy dynamics.
The investigation centers on Powell’s congressional testimony and cost overruns related to renovation projects at the Federal Reserve’s headquarters. The move, initiated by the U.S. Attorney’s Office in Washington, has drawn bipartisan criticism and significant pushback from within and outside the Trump administration. Powell himself responded with a rare video statement, asserting that the threat of criminal charges is tied to policy disagreements—particularly over interest rate decisions—rather than genuine wrongdoing.
Bessent’s concerns reflect broader unease among economic policymakers about the optics and implications of pursuing criminal charges against a sitting central bank leader. Officials fear that such high‑profile legal action could shake investor confidence, disturb financial benchmarks like the dollar and bond markets, and entrench Powell’s position at the Fed rather than facilitate leadership transitions. Some lawmakers, including key Republicans, have indicated they may oppose future Federal Reserve appointments until the matter is resolved, underscoring the political complexity surrounding the probe.
While the Treasury Department has publicly stated there is “zero daylight” between Bessent and President Trump, sources emphasize that Bessent was not defending Powell personally but was focused on the broader economic ramifications. His intervention highlights the tension between the Justice Department’s prosecutorial authority and economic leadership’s desire for monetary policy stability.
The ongoing debate emphasizes the delicate balance between law enforcement, political influence, and institutional independence. As the situation develops, market participants and policymakers alike are watching closely to see how the investigation might influence central bank credibility and economic confidence in the months ahead.
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