Scott Bessent, US treasury secretary, during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, DC, US, on Thursday, Feb. 5, 2026. (Kent Nishimura/Bloomberg via Getty Images).
President Donald Trump has verbally and legally assaulted the Federal Reserve and its chair Jerome Powell to secure lower interest rates. The gambit could hit the next Fed chair too.
During a hearing with the Senate Banking panel on the U.S. financial system, Treasury Secretary Scott Bessent was grilled on the possibility of Trump suing his new Fed pick, Kevin Warsh, to secure lower interest rates.
Sen. Elizabeth Warren asked Bessent to pledge that Warsh won't be sued if the Fed strays from Trump's stated preference for more rate cuts. Over the weekend, Trump reportedly joked at a Washington dinner that he would sue Warsh if the Fed didn't slash interest rates further.
"That is up to the president," Bessent responded at the hearing, and claimed "it was a joke."
Trump recently named Warsh as his choice to lead the Fed once Powell's term sunsets in May. He told NBC News in an interview published Wednesday that Warsh wouldn't have been picked for the role had he expressed support for raising interest rates. He added the Fed is "in theory" independent from the executive branch.
The Fed's separation from the White House is what allows the central bank to steer interest rates without overt political interference.
The Warsh nomination isn't likely to clear the Senate anytime soon. Republican Sen. Thom Tillis of North Carolina has vowed to oppose new Fed personnel until the Department of Justice wraps up its investigation into Powell. The panel is deadlocked while he keeps up the blockade.
Tillis mentioned the probe during Thursday's Senate hearing. The DOJ said it was investigating whether Powell misled the same panel regarding renovations at the Fed's aging headquarters last year.
Tillis, though, brought up recent statements from key Republican senators who say they didn't believe Powell's actions rose to the criminal level. Sen. Tim Scott, who chairs the Senate Banking Committee, is among them.
"I do think it's fine for me being a witness at the scene of the alleged crime, saying that we got a majority of people on this side of the aisle that didn't think a crime got committed either," Tillis said.
He cited a famous skit from comedian Dave Chapelle, in which he portrays a drug dealer who pleads the Fifth Amendment non-stop on Capitol Hill to avoid incriminating himself.
"If we do this sort of stuff, I believe that future hearings for the Treasury secretary and other members will be a lot like that Chappelle skit on 'I plead the fifth'... Is that really the way we want oversight to go in the future?" Tillis said.
