U.S. Treasury Secretary Scott Bessent launched a sharp critique against Jerome Powell on Wednesday, labeling the outgoing Federal Reserve Chair’s plan to remain on the Board of Governors as a “violation” of long-standing institutional norms, according to Bloomberg via MSN.
Speaking on Fox Business, Bessent questioned Powell’s commitment to the traditions of the central bank, arguing that his continued presence would undermine the transition of power.
The friction comes after Powell presided over his final policy meeting as Fed Chair. While he is set to be succeeded by Kevin Warsh—President Donald Trump’s nominee for the position—Powell announced he intends to retain his seat as a Fed Governor for an unspecified period.
Powell defended the decision by citing concerns over recent legal challenges against the Fed and an ongoing investigation into a building renovation project, stating he would only depart once the probe was “truly over.”
Read more about this topic: US: Powell plans to remain on Fed board (with video)
Bessent dismissed these justifications, characterizing the move as an “insult” to the incoming leadership and current Republican-appointed governors, including Michelle Bowman and Christopher Waller.
“It’s highly unusual for someone who says he’s an institutionalist and cares about norms,” Bessent said. He added that the decision implies a lack of trust in his colleagues to “maintain the integrity of the Fed” without his oversight.
The dispute highlights growing tensions between the Trump administration and the central bank’s leadership. As Warsh prepares for his Senate confirmation, Powell’s plan to stay on as a governor creates a rare and potentially awkward dynamic within the Fed’s governing body, as former chairs typically exit the board entirely upon the conclusion of their leadership term to allow their successor a clean slate.
