A criminal investigation into Fed Chair Jerome Powell "made a mess" and could prove bad for financial markets, US Treasury Secretary Scott Bessent reportedly told President Trump late Sunday.
Sources familiar with Bessent's call to Trump told Axios, "The secretary isn't happy, and he let the president know."
The report emerged as Trump appeared to distance himself Sunday night from the probe of Fed chair Jerome Powell for allegedly misrepresenting the costs of renovations to the Federal Reserve's headquarters in D.C.
US Attorney Jeanine Pirro's office DC launched the probe without giving a heads-up to Treasury, top White House officials or the main Justice Department, sources told Axios.
"Bessent's concerns about the investigation aren't just rooted in the financial markets," sources reportedly said.
According Axios sources, Bessent "thought that when the president named a new Fed chair, that Powell would go. But now that's not going to happen...Now [Powell is] dug in. This really made a mess of things."
Powell's term as chair ends in May, and the administration was hoping he would step down sooner once Trump nominated a replacement, the report added.
It was also reported that Bessent's worries about the financial fallout were somewhat realised Monday, when the dollar dropped as bond yields and the price of gold rose amid worries about political interference in the Fed.
Sources said Bessent didn't question the need for a Powell investigation and wasn't defending the Fed chair in his talk with Trump.
The Trump administration's decision to open a criminal investigation into Fed Chair Jerome Powell drew condemnation from former Fed chiefs and a chorus of criticism from key members of Trump's Republican Party on Monday.
This followed an unusually sharp public rebuke from Powell, who called the Trump administration's probe a "pretext" to win presidential influence over interest rates.
The investigation, revealed late on Sunday when Powell said the Fed had received subpoenas from the US Justice Department, was approved and started by Jeanine Pirro, the US Attorney in Washington and an ally of President Donald Trump, sources told Reuters.
Pirro said in a statement Monday evening that the Justice Department took legal action because the Federal Reserve had ignored requests to discuss cost overruns in a project to renovate two historical buildings at its headquarters.
"This office makes decisions based on the merits, nothing more and nothing less," Pirro added on X.
Curated by Maria Santos
