Treasury Secretary Bessent turns up heat on Fed’s Jerome Powell

Treasury Secretary Scott Bessent, who for the past year has been seen as the Trump administration’s moderating voice on Jerome Powell, delivered his most pointed public critique of the Federal Reserve chair to date. However, he is criticizing Jerome Powell.

Bessent said on Tuesday it would be a mistake for Federal ​Reserve Chair Jerome Powell to attend Supreme Court arguments in a case ‌about President Donald Trump’s attempt to fire a central bank governor.

The Supreme Court justices on Wednesday will consider the legality of Trump’s bid to remove Fed Governor Lisa Cook, who the courts have allowed to continue serving on the Fed while Trump’s attempt to fire ‌her is litigated.

The Associated Press and other media reported on Monday that ​Powell planned to attend the court’s oral arguments, a potent symbol of the administration’s ongoing clash with the Fed following U.S. Department of Justice threats to pursue a criminal investigation of ‍him. Powell called the threat a “pretext” to pressure him over monetary policy.

The effort to fire Cook over alleged misstatements on mortgage documents has been similarly slammed as cover for administration efforts to either get interest ⁠rates lowered or open more seats on the Fed’s Board of Governors for Trump ‍to fill.

“I actually think that’s a mistake,” Bessent said in an interview with CNBC, referring to Powell’s plan ‌to ‌attend the hearing. “If you’re trying not to politicize the Fed, for the Fed chair to be sitting there, trying to put his thumb on the scale, is a real mistake.”

To be buffered from political influence, Fed governors serve 14-year terms, and can only be removed “for cause,” a standard that has never been tested in court but is considered to exclude firing over ‍policy disagreements.

Whether or not the tension between Powell and the Trump administration escalates into something problematic remains to be seen. But it is clear that there is conflict.