Federal Reserve Investigation and Independence

Treasury Secretary Scott Bessent discussed the Federal Reserve’s independence during an interview with NBC’s Kristen Welker on “Meet the Press.” He remarked that while the Fed can operate independently from the administration, it could still face investigations and other forms of oversight.

On January 11, the Department of Justice (DOJ) revealed that a criminal investigation into Federal Reserve Chairman Jerome Powell had been initiated by the U.S. Attorney’s Office for the District of Columbia. Welker questioned Bessent about this investigation and whether President Trump truly values the Fed’s independence.

Bessent insisted that the President does appreciate the Fed’s autonomy, adding, “Independence does not mean no oversight.”

Welker then raised concerns regarding an investigation into the ongoing renovations of the Fed’s headquarters and how this might affect its independence. Bessent responded that renovating the White House was not comparable to the Fed’s situation, emphasizing the scale of budget overruns related to the Fed’s planned updates.

“Kristen, renovating the White House is not 700 million, 1 billion, 500 million over budget. And the White House is privately funded. If you want to buy a new chair for the Treasury Department office, that’s a diversion,” Bessent remarked. He pointed out that the Federal Reserve generates its own funds and suggested that transparency is necessary.

Bessent expressed his frustration that the Fed had not undertaken its own investigation, stating, “I’ve been asking the Fed to conduct its own internal investigation since last summer, and they haven’t listened.” He reiterated that if the DOJ reached out, he would respond.

In July 2025, Rep. Anna Paulina Luna from Florida referred Powell to the DOJ to probe into alleged perjury over a corporate headquarters renovation costing over $2 billion. This project initially approved in 2017 has seen costs increase by around $700 million, now totaling approximately $2.5 billion.

The Fed attributed the rising expenses to the pandemic, which has escalated raw material prices, along with some work being underground. Accusations of extravagant spending, such as VIP dining areas and elevators, surfaced but were denied by Powell.

Powell later described the investigation as “unprecedented” and suggested it should be understood within a context of ongoing political pressure. He remarked on the importance of the Fed maintaining evidence-based interest rate decisions without yielding to intimidation.

“I have served on the Federal Reserve Board under four administrations, including Republican and Democratic,” Powell stated, and emphasized his commitment to focusing solely on stabilizing prices and maximizing employment.

Despite earlier tensions over interest rates between Trump and Powell, the President indicated in April 2025 he had “no intention” of dismissing the chairman. Powell’s term is set to last until May 2026.