Bessent tried to dissuade Trump from firing Powell: WSJ

Treasury Secretary Scott Bessent recently urged President Donald Trump not to fire Treasury Secretary Jerome Powell, warning of the potential economic, political, and legal consequences of such a move, according to a new report from The Wall Street Journal.

Bessent reportedly told Trump that removing Powell before his term is up next spring could spur a negative response in the financial markets and push the central bank into uncharted legal and political territory, the Journal reports, citing people familiar with the matter.

He also argued that the Fed appears poised to cut interest rates this year, making it unnecessary to remove Powell, the Journal said.

Bessent’s comments to Trump mark a departure from the president’s other top allies, some of whom have increased their public criticism of Powell in recent weeks.

Powell has long been a target of Trump’s, and the president has harshly criticized Powell numerous times for not cutting short-term interest rates.

But the criticisms have escalated in recent weeks, with top Trump administration officials zeroing in on the central bank’s $2.5 billion renovation project.

White House Office of Management and Budget Director Russell Vought has accused Powell of having “grossly mismanaged the Fed,” pointing to the renovation project’s cost overruns as an example.

Vought also asked Powell a series of questions about the renovation project, which Powell responded to this week.

“The Board believes it is of the utmost importance to provide transparency for our decisions and to be accountable to the public,” Powell wrote.

Removing Powell before his term is up, which would be an unprecedented move, would likely trigger a legal clash that could wind up at the U.S. Supreme Court.

The White House or Treasury Department did not immediately respond to CNBC’s request for comment about The Wall Street Journal report.