Bessant warns: The Fed investigation could trigger market turmoil and lead Powell to refuse to relinquish power.
TL;DR
U.S. Treasury Secretary Bessant warned Trump that a federal investigation into Fed Chair Powell could disrupt markets and lead Powell to resist stepping down, with the probe launched without notifying key officials.
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According to Odaily, two sources familiar with the matter revealed that U.S. Treasury Secretary Bessant told Trump Sunday evening that the federal investigation into the Federal Reserve Chairman had "made a mess" and could have adverse effects on financial markets. One source familiar with the call between Bessant and Trump said, "The secretary is very unhappy, and he has let the president know about it." Trump appears to be deliberately distancing himself from the investigation into Federal Reserve Chairman Powell. The source said that the Washington office of U.S. Attorney Jeanine Pirro launched the investigation without prior notification to the Treasury Department, senior White House officials, or the Justice Department. Another source said that Bessant "thought that Powell would leave when the president appointed a new Fed chairman. But that's not happening now. Now Powell is taking a tougher stance. It's really made a mess of things." However, the source said that Bessant did not question the necessity of investigating Powell in his conversation with Trump, nor was he defending the Fed chairman.