Treasury Secretary Scott Bessent says Federal Reserve has lost public trust amid Powell probe

Feb 4, 2026, 4:34:38 PM UTC(7 hours ago)

Impact: Medium

Affected Assets

Treasury Secretary Scott Bessent stated that the Federal Reserve's independence is based on public trust, which he believes the institution has lost.
Bessent's comments came while defending the Department of Justice's criminal investigation into Fed Chair Jerome Powell regarding alleged cost overruns on the central bank's headquarters renovation project.
Powell has publicly rejected the probe, calling it a "pretext" designed to pressure the Fed into lowering interest rates and arguing it undermines the central bank's independence.
Bessent also criticized the Fed's financial performance, claiming the institution is losing over $100 billion annually due to "mistimed asset purchases" and a lack of accountability.
Despite initial concerns reported by Axios that the probe could harm markets, Bessent later noted that financial markets reacted positively, with the stock market rising and bond yields falling, suggesting markets were the "ultimate arbiter" of the Fed's independence.

BESSENT: INDEPENDENCE OF FEDERAL RESERVE IS BASED ON ITS TRUST AMONG THE AMERICAN PEOPLE; IT HAS LOST THAT