Broad bipartisan and market pushback grows over Powell criminal probe

A criminal investigation into Federal Reserve Chair Jay Powell has prompted growing resistance in Washington, with former central bankers, some Republican lawmakers and market participants rallying to his defense as the dispute with the Trump administration deepens. Powell accused the administration of using threats of a federal criminal investigation as “pretexts” to influence Fed policy, a forceful public response that has drawn denunciations from all living former Fed chairs and some former Treasury secretaries, including Hank Paulson.

The current Treasury secretary, Scott Bessent, reportedly raised concerns about the probe directly with President Trump, telling him the investigation “made a mess,” according to Axios citing an unnamed source; a Treasury representative said there is “zero daylight” between Bessent and the president.

Republican Senator Thom Tillis vowed to block confirmation of the administration’s Fed nominees until the Powell matter is resolved, a move that won the backing of Senator Lisa Murkowski; other Republicans have also expressed concern. Market signals have been mixed: S&P 500 futures were slightly lower, the dollar rebounded and the 10-year Treasury yield, at about 4.2 percent, has climbed since Powell released an SOS dispatch, prompting warnings that the probe could have unintended effects on yields.

What happens next remains uncertain.

Key Topics

Politics, Jay Powell, Federal Reserve, Trump Administration, Scott Bessent, Thom Tillis