Treasury Secretary Scott Bessent had no idea that the Justice Department, under President Donald Trump, had begun legal action against Federal Reserve Chairman Jerome Powell.
Axios reported Monday that Bessent spoke to Trump about the impact of the investigation on financial markets and expressed his concern about internal efforts to pressure Powell into leaving the Board of Governors.
Powell's term as Fed Chair is up in May, but he remains on the board until Jan. 2028.
Axios described Bessent as "perturbed" by the situation.
Bessent's fears were fully realized when the U.S. "dollar dropped as bond yields and the price of gold rose amid worries about political interference in the Fed," the report said.
A source familiar told Axios, "The secretary isn't happy, and he let the president know."
The probe was launched by Washington, D.C., U.S. Attorney Jeanine Pirro and Powell was handed a subpoena on Friday. Pirro didn't give a heads-up to the Treasury Department.
Trump claimed he didn't know anything about it and wasn't involved while speaking to NBC News.
Bessent "thought that when the president named a new Fed chair, that Powell would go. But now that's not going to happen," a source told Axios. "Now [Powell is] dug in. This really made a mess of things."
Treasury spokesperson said that "there is zero daylight between Secretary Bessent and President Trump. The sources in the story do not speak for the secretary."
Bloomberg News reported on Monday that Federal Housing Finance Agency Director Bill Pulte was behind the investigation of Powell, but speaking to Bloomberg TV, Pulte denied the claim.
Axios wrote, "Pulte has a reputation within the administration for overstepping, namely by pushing the president to get DOJ to criminally charge former FBI Director James Comey and New York Attorney General Leticia James." Both cases have suffered under Justice Department turnover and quick appointments.
The report also noted that Pulte has clashed with Bessent in the past.
Read the full report here.
