In recent remarks on NBC News' "Meet The Press," Treasury Secretary Scott Bessent addressed concerns about the Federal Reserve's independence amid a Justice Department investigation into alleged budget overruns related to the central bank's Washington, D.C., headquarters renovation project. Bessent unequivocally stated that President Donald Trump remains fully committed to preserving the Federal Reserve's autonomy in its policymaking and operational functions.
"Of course he’s committed to the independence of the Federal Reserve," Bessent declared during the interview. Yet, he immediately qualified this by emphasizing that independence does not imply a lack of oversight. He argued that a balance must exist between autonomy and accountability to ensure public trust and institutional integrity.
Bessent defended the Department of Justice's ongoing probe into the Federal Reserve’s expenditure management, highlighting that the central bank’s unique financial position—possessing the authority to produce its own currency—necessitates stringent scrutiny. "The Federal Reserve has magic money, they print their own money," he said, underscoring why enhanced oversight is warranted given the potential impact of its financial decisions.
The Treasury Secretary revealed that since the previous summer, he has urged the Federal Reserve to conduct its own internal examination of the renovation project's budget matters, efforts which have reportedly been disregarded by the institution. Furthermore, Bessent criticized the Fed for not sufficiently cooperating with Justice Department inquiries. "If I were to receive inquiries from the Justice Department, I would answer them," he commented, signaling his expectation for transparent engagement.
When questioned about reports suggesting that Bessent privately advised President Trump of concerns that the investigation could unsettle financial markets, he pointed to empirical market data as evidence that such fears have not materialized. Specifically, he noted that stock prices have risen and bond yields have declined in the relevant period, indicating sustained investor confidence.
He concluded his remarks by stating that financial markets serve as the ultimate evaluator of whether the central bank’s independence is being compromised. "Bringing in some sunlight does not mean coercion," Bessent said, advocating for openness without implying undue influence over the Fed’s operations.
Meanwhile, significant figures in economic policy have expressed steadfast support for Federal Reserve Chair Jerome Powell amidst the Justice Department's investigation. Prominent former Fed chairs, including Ben Bernanke, Alan Greenspan, and Janet Yellen, have publicly criticized the probe as "extremely chilling" to the central bank’s independence. This sentiment reflects a broad consensus among veteran policymakers about the importance of safeguarding the Fed from political encroachment.
Support has extended beyond U.S. borders. European Central Bank President Christine Lagarde, speaking on behalf of the eurozone's twelve central banks, affirmed solidarity with the Federal Reserve and Chair Powell. This international backing underscores the central bank’s critical role within the global financial architecture.
Prominent economist Justin Wolfers has openly condemned the administration’s investigative actions, labeling them "unprecedented" and comparing them to tactics typical of "tin-pot dictators." Wolfers highlighted the potential long-term negative consequences of such approaches, describing the situation as "the sort of story that never ends well." His critique raises concerns over possible implications for institutional independence and market stability should political pressure intensify.
Overall, the discourse surrounding the Justice Department’s investigation into the Fed's renovation project expenses has illuminated ongoing tensions between ensuring accountability within the Federal Reserve and preserving its operational independence. Treasury Secretary Bessent's comments stress that supporting the Fed’s autonomy does not negate the necessity for oversight—particularly when the institution manages resources with broad economic consequences. Stakeholders across government, the economy, and the international community continue to monitor developments to assess the impact on central bank credibility and market confidence.