Rumors Spread of Disagreement Between Donald Trump and the US Treasury Secretary Over Fed Chair Jerome Powell

In recent days, the U.S. political scene and financial markets have been buzzing over reports of disagreements between President Donald Trump and Treasury Secretary Scott Bessent regarding the investigation into Federal Reserve Chair (Fed) Jerome Powell. The incident has not only caused internal turmoil within the government but also triggered clear negative reactions across global markets. Treasury Secretary Warns of Market Risks According to sources close to the White House, during a meeting on Sunday night, Treasury Secretary Scott Bessent directly warned President Trump that the federal investigation targeting Fed Chair Jerome Powell is creating “significant turmoil” and could seriously damage market confidence. Bessent emphasized that investigating a sitting Fed Chair is “unprecedented,” which could cause investors to worry about political interference in monetary policy — a cornerstone of U.S. economic stability. Market Reacts Instantly These concerns quickly reflected in the markets during the early trading session. The US dollar weakened, US bond yields rose, and gold prices surged. Analysts believe these fluctuations stem from fears that the Fed’s independence is at risk — a vital factor for the credibility of the U.S. financial system. An insider told Axios: “The Treasury Secretary is unhappy and has made his position clear to the President.” Trump Seeks to Distance Himself from the Investigation In response to the wave of criticism, President Trump has tried to distance himself from the investigation into Powell, related to allegations of providing false information about the renovation costs of the Fed headquarters in Washington. Notably, the investigation is believed to have been initiated by the Washington D.C. Office of the Prosecutor without prior notice to the Treasury Department, senior White House officials, or the Department of Justice — a move that surprised many within the administration. Sources describe this as “unprecedented in history,” sparking major controversy over the political motives behind it. Powell Responds, Accuses Politicization of the Judiciary In a rare move, Fed Chair Jerome Powell posted a video response denying all allegations and claiming that the Trump administration is “politicizing” the Department of Justice to pressure the Fed into cutting interest rates faster than the President desires. He stated: “We are facing the risk of criminal prosecution simply for implementing interest rate policies in the public interest.” At the same time, Senator Thom Tillis — a key member of the Senate Banking Committee — announced he would block the nomination process for Powell’s replacement due to concerns over this investigation. Powell’s Replacement Plan Collapses According to sources, Bessent’s concerns extend beyond the markets. Powell’s term ends in May, and the Trump administration had hoped he would step down soon after announcing a new Fed Chair candidate. However, the investigation has made this scenario impossible. An internal source said: “Bessent believed Powell would voluntarily step down once a successor was announced. But now, that’s no longer possible. Powell is cornered, and things have become much more complicated.” White House Denies Disagreement In response to leaked information, a Treasury Department spokesperson told Axios that there is no disagreement between Secretary Bessent and President Trump. According to this statement, the sources do not represent the official position of the Secretary, and it was emphasized that Ms. Bessent does not oppose the investigation’s necessity nor did she defend Powell during the meeting with the President. Speculation About Bill Pulte’s Role Some senior officials in the government suggest that the idea of investigating Powell may originate from Federal Housing Finance Agency Director (FHFA) Bill Pulte. However, Pulte denied this in an interview with Bloomberg Television, asserting that it is not within his authority. Nonetheless, observers note that Pulte has repeatedly called for criminal prosecution of other individuals, albeit unsuccessfully. Trump Continues Criticizing Powell In an interview with NBC News, President Trump stated he “was not aware” of the subpoenas related to the investigation. However, he did not hesitate to criticize Powell, saying: “He’s not good at running the Fed, and his building is a mess.” These comments suggest that Trump is unlikely to end the investigation, although he continues to show a certain level of respect for the cautious stance of the Treasury Secretary.