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U.S. Treasury Secretary Scott Bessent told “Kudlow” Friday that the probe into Federal Reserve Chairman Jerome Powell is likely due to “construction incompetence.”
“I don’t know anything about construction, seemingly not many people at the Fed do,” he said.
A criminal investigation into Powell was launched to determine whether he lied to Congress about the scope of renovations at the central bank’s Washington headquarters. The Department of Justice has threatened a criminal indictment related to Powell’s Senate testimony regarding the renovations.
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While Bessent said he does not know much about the investigation, he argued the Fed needs “a lot of work,” and the probe into Powell could revive his push for more transparency at the institution.
“It does need a thorough overhaul,” he told FOX Business host Larry Kudlow. “I’ve been calling for an internal investigation or an internal review of all this, so perhaps this will push that idea along.
“It has a tremendous amount of sway and influence over their [Americans’] life, but there is no accountability.”
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The Treasury secretary reiterated President Donald Trump’s distaste for the economic leader.
“He’s frequently expressed his disappointment with Chair Powell,” Bessent said.
Powell labeled the probe, approved by U.S. Attorney for the District of Columbia Jeanine Pirro, as “unprecedented” in a video message posted by the Fed.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation,” Powell said in the video.
A fierce Powell critic, Trump has regularly threatened to fire the chair and accused him of acting politically despite the role of chair requiring a nonpartisan stance.
Bessent went on to address the race for Powell’s successor, announcing that the final round of interviews is complete.
President Trump said Friday he would like Kevin Hassett to remain in his role as director of the National Economic Council, effectively removing him from the race to succeed Powell.
“I actually want to keep you where you are, if you want to know the truth,” Trump said at the White House.
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Many had considered Hassett a leading contender, but Bessent said the final choice ultimately rests with Trump.
“If that’s the president’s prerogative, then so be it,” he said.
Bessent told FOX Business that Trump does not confide in him about his decision-making process for the next Fed chair.
“President Trump hasn’t shared his thoughts with me,” he said. “What I can tell you is he’s been very deliberate. He has asked exactly the questions that I think you and I and the markets would want to ask.”
Bessent said the president is looking for someone who can bring order to the “sprawling” Federal Reserve.
“Only the president knows. … It’s his prerogative. He has been thinking about this almost since day one of Trump 2.0,” he added.
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President Trump indicated he will announce Powell’s replacement in January, and Bessent revealed when that announcement could come.
“I’d expected that we would have a decision either before he leaves for Davos or when he returns,” he said.
