Bessent unhappy with criminal investigation of Fed Chair Jerome Powell

Treasury Secretary Scott Bessent told people he was unhappy with the decision to criminally investigate Fed Chairman Jerome Powell, a source with knowledge of the matter told CNN.

Bessent expressed his concern that the decision would negatively affect the markets. He has warned President Donald Trump in the past that firing Powell would also cause volatility in markets, but that did not appear to be the case on Monday.

The investigation, which drew bipartisan criticism after it was first revealed Sunday evening, focuses on testimony Powell gave before Congress in June about renovating the central bank’s headquarters in Washington, D.C. Powell himself responded with an extraordinary video statement, claiming the investigation stemmed from his ongoing fight with the president over interest rates.

“The threat of criminal charges is a result of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the President’s preferences,” Powell said in a statement.

Bessent’s disappointment first reported axiosHe said he told Trump late Sunday that the federal investigation into Powell was “causing confusion.” CNN has reached out to the Treasury Department for comment. Some administration officials insisted that the Justice Department’s unprecedented move was not political and stressed the need for further investigation into Powell’s testimony.

Trump and Powell have long argued over interest rates, and the president has made it public. He toyed with firing the Fed chairman – Economists worried that the move would undermine the institution’s historic independence and lead to potentially serious economic consequences. In an interview with NBC News On Sunday, Trump denied knowledge of the investigation, saying, “I don’t know anything about it, but he’s certainly not very good at the Fed and he’s not very good at building buildings.”

But Russell Vought, Trump’s Office of Management and Budget (OMB) director, said: previously accused Powell of breaking the law By failing to comply with government oversight regulations and lying to Congress about details of planned renovations to the Fed’s headquarters. And Trump himself openly argued with Powell at a meeting over the renovation’s price tag. Public tour in July.

The revelation of the investigation sparked outrage on Capitol Hill. Republican Senator Thom Tillis, a member of the banking committee, said in a post on (Tillis is not seeking re-election.) GOP Sen. John Kennedy, another banking committee member, told reporters Monday that he would be “stunned” if Powell “did anything wrong.”

GOP Sen. Lisa Murkowski said the investigation was an “attempt at pressure” by the Trump administration and suggested it could prompt a congressional investigation of the Justice Department. And Senate Majority Leader John Thune, while repeatedly emphasizing that he wants to see the Fed operate “free of politics,” suggested the move could complicate his chamber’s ability to replace Powell this spring.

It turned out there was There is almost no reaction in the marketsat least initially. On Monday, the Dow closed up 86 points, or 0.17%, recouping losses after falling almost 500 points earlier. The S&P 500 index closed at a record level with an increase of 0.16%. The tech-heavy Nasdaq Composite gained 0.26 percent.

CNN’s Ted Barrett, Sarah Ferris, Bryan Mena, Manu Raju, Morgan Rimmer and Samantha Waldenberg contributed to this report.

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