Photo by Scott Bessent says Donald Trump brings up the Federal Reserve with him every single day. The president has made it clear since before he won the election again that he does not like Jerome Powell, neither as a person nor as the head of the most powerful central bank on the planet.
“He’s frequently expressed his disappointment with Chair Powell,” Scott said during his appearance on Kudlow.
Right now, Powell is facing a criminal investigation. The Department of Justice is looking into whether he lied to Congress about the massive renovation project going on at the Fed’s headquarters in Washington.
Scott didn’t defend him. “I don’t know anything about construction, seemingly not many people at the Fed do,” he said. That was his entire take. Brutal and blunt.
Scott calls for overhaul as Powell investigation heats up
The Treasury Secretary admitted he doesn’t have much information about the case, but he used the opportunity to drag the Fed for how it operates.
He said the place “needs a lot of work.” Then he doubled down. “It does need a thorough overhaul,” he told Larry Kudlow. According to Scott, the Federal Reserve affects every American, but there’s “no accountability” inside that building.
He said this scandal might finally push his long-standing demand for an internal investigation. “I’ve been calling for an internal investigation or an internal review of all this, so perhaps this will push that idea along,” Scott said. This isn’t just about drywall and plumbing anymore. It’s turned into a war over who controls monetary policy.
Powell made his own statement. “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,” he said in a video. But that didn’t stop the firestorm.
Trump, a longtime Powell critic, has threatened to fire him before. He’s accused Powell of acting politically, even though the role of Fed Chair is supposed to be nonpartisan. This time, the problem is bigger than just politics. A criminal charge could remove Powell permanently.
Scott was also asked about who might take over. He confirmed the final round of interviews is done. But Trump isn’t telling him much. “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.”
Kevin Hassett had been seen as a top contender to replace Powell. But Trump made it clear that’s off the table. “I actually want to keep you where you are, if you want to know the truth,” he told Hassett directly at the White House. That pretty much ended Hassett’s chances.
Scott confirmed it. “If that’s the president’s prerogative, then so be it,” he said. As far as who gets the job, it’s still anyone’s guess. “Only the president knows. … It’s his prerogative. He has been thinking about this almost since day one of Trump 2.0,” Scott said.
The decision is expected in January. Scott said he thinks it’ll happen “either before he leaves for Davos or when he returns.”
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