Ahmed Kamel – Egypt Daily News
A U.S. Justice Department criminal investigation into Federal Reserve Chairman Jerome Powell has exposed growing unease within President Donald Trump’s own administration, with Treasury Secretary Scott Bessent privately warning that the probe risks becoming an unnecessary distraction at a sensitive moment for the U.S. economy, according to multiple sources familiar with the matter.
Bessent conveyed his concerns directly to Trump during a phone call on Sunday, sources told ABC News. While he did not challenge the legitimacy of the investigation or explicitly defend Powell, Bessent made clear that he was troubled by the potential consequences of scrutinizing the head of the central bank amid ongoing economic and political pressures. Axios first reported details of the call.
The Treasury Department publicly pushed back on the characterization of any internal rift. In response to questions about the Axios report, a spokesperson said there was “zero daylight” between Bessent and Trump, adding that unnamed sources cited in media accounts did not speak on the secretary’s behalf. The White House did not respond to requests for comment.
Powell revealed the existence of the Justice Department investigation in a rare video message released Sunday night, an unusual step for a Federal Reserve chair and one that underscored the seriousness of the situation. The probe centers on Powell’s testimony last June regarding the multiyear renovation of the Federal Reserve’s historic buildings in Washington, a project that has drawn scrutiny over cost overruns.
The announcement immediately triggered backlash from a wide spectrum of political and economic figures, including former Federal Reserve and Treasury officials and current members of Congress from both parties. Several Republicans who typically align with the administration warned that a criminal investigation into the Fed chair could undermine confidence in the central bank’s independence, a cornerstone of U.S. economic credibility.
Powell, for his part, has said he believes the investigation is politically motivated. He has long been a frequent target of Trump’s criticism, particularly over interest rate policy. The president has repeatedly accused Powell of moving too slowly to cut rates, arguing that tighter monetary policy has weighed on economic growth.
White House press secretary Karoline Leavitt sought to draw a distinction between criticism and intervention, saying Monday that Trump has “every right” to criticize Powell’s leadership but did not direct the Justice Department to open an investigation.
Trump himself addressed the issue on Tuesday as he departed the White House for Michigan, where he was scheduled to deliver an economic speech. Responding to a question from ABC News Chief White House Correspondent Mary Bruce about concerns from fellow Republicans, Trump dismissed fears that the probe could damage confidence in the Fed.
“He’s billions of dollars over budget,” Trump said of Powell. “So, either he’s incompetent or he’s crooked. I don’t know what he is. But certainly, he doesn’t do a very good job.”
The clash highlights a broader and intensifying struggle over the role and independence of the Federal Reserve, as well as the political pressures surrounding economic management in an election year atmosphere. With markets closely watching both monetary policy and signals from Washington, critics warn that the investigation risks entangling the central bank in partisan conflict at a time when stability and predictability are especially prized.
