Treasury Secretary Scott Bessent on Thursday left open the possibility the administration could sue President Donald Trump’s pick for Federal Reserve chair, Kevin Warsh, if he doesn’t deliver on the president’s desired interest rate cuts.
Trump said Saturday he would consider suing Warsh if he did not cut interest rates. The Fed is an independent agency.
When asked by Sen. Elizabeth Warren (D-Mass.) during a Senate Banking Committee hearing about the possibility of a lawsuit, Bessent refused to answer.
“That is up to the president,” he said, before adding: “Warsh is highly qualified.”
The Trump administration, including Bessent, has been sharply critical of the Fed and its current Chair Jerome Powell for its interest rate policy and its handling of a building renovation. The Department of Justice is investigating Powell in relation to the renovation, moves Powell has called “pretexts.”
Bessent furthered that criticism Thursday, saying Treasury cannot print “magic money” to solve some of the nation’s economic issues — referring to the Fed’s ability to expand the amount of money in circulation, a power both Bessent and Warsh say has been overused.
The comments echo remarks Bessent made in a fiery House hearing Wednesday. “The Fed has lost accountability,” he said. “It lost the trust of the American people when it allowed the greatest inflation in 49 years.”
Sen. Thom Tillis (R-N.C.), who has said he will not vote for Warsh until the Powell probe is resolved, said senators had already heard from Powell about the cost overruns.
“[Powell] was testifying and we didn’t see a crime,” he said.
There were multiple moments of tension between the Treasury secretary and Democratic senators Thursday, similar to Wednesday’s at-times rocky House meeting.
Bessent took shots at Warren, with whom he has feuded publicly in the past. When she asked why he had previously written that tariffs would be inflationary — an economic effect he and the administration argue is not at play today — he answered that he is not always right.
“A year before [writing that letter to investors], I also wrote that I thought Senator Warren would be the Democratic presidential nominee. So my predictions have been bad,” he said.
In one line of questioning from multiple senators, Bessent was asked how he, as acting director of the Internal Revenue Service, would handle the president’s $10 billion dollar lawsuit against the tax agency, filed last week.
“It’s a Justice department matter,” he said. “I will follow the law.” He acknowledged that if the president were to be successful, the funds would come out of the Treasury General Account, the checking account of the government that he oversees.
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