Bessent Won't Rule Out DOJ Probe of Fed Nominee Warsh

Treasury Secretary Scott Bessent on Thursday refused to rule out a potential criminal investigation into Kevin Warsh, President Donald Trump's nominee for Federal Reserve chair, if Warsh disobeys presidential calls to cut interest rates.

The exchange occurred during a Senate Banking Committee hearing when Senator Elizabeth Warren, the committee's top Democrat, challenged Bessent over a recent joke made by President Trump. According to The Wall Street Journal, Trump quipped that he would sue Warsh if the Fed nominee did not lower rates to his satisfaction.

"Can you commit right here and now that Trump's Fed nominee Kevin Warsh will not be sued, will not be investigated by the Department of Justice if he doesn't cut interest rates exactly the way that Donald Trump wants?" Warren asked.

Bessent’s response was brief: "That is up to the president."

Traditionally, the White House maintains a separation from the Federal Reserve, allowing the independent board to make decisions on interest rates without political interference.

Sen. Elizabeth Warren questions Treasury Secretary Scott Bessent during a Senate Banking Committee hearing on February 5, 2026.

A Pattern of Pressure on the Central Bank

Bessent's testimony was his second appearance on Capitol Hill this week, following a contentious hearing with the House Financial Services Committee. In that session, Democrats questioned him on topics including tariffs, inflation, crypto regulation, and the independence of the Federal Reserve.

The issue is particularly sensitive given President Trump's recent actions targeting current Fed Chair Jerome Powell for not lowering interest rates. On January 11, Powell confirmed he was the subject of an unprecedented Department of Justice investigation related to cost overruns during the renovation of the Federal Reserve's headquarters.

Critics of the administration argue the probe, which references Powell's testimony to the Senate Banking Committee last year, is a thinly veiled effort to pressure the central bank's leadership.

Political Fallout and Nomination Fights

The pressure campaign has triggered pushback from both sides of the aisle.

Committee Chair Tim Scott, a Republican from South Carolina, stated this week that he does not believe Powell committed a crime in his testimony. Another Republican on the committee, Senator Thom Tillis of North Carolina, has pledged to block Warsh's nomination unless the DOJ drops its investigation into Powell, whose term as chairman ends in May.

Meanwhile, President Trump has doubled down on the investigation.

Warren and her Democratic colleagues have also urged Scott to halt Warsh's nomination until the investigations into both Powell and Federal Reserve Board Governor Lisa Cook—who is being investigated for alleged mortgage fraud—are concluded.

Before the hearing, Warren characterized the administration's actions as an attempted "takeover" of the Federal Reserve.

"Donald Trump has been trying to take over the Fed for months and months now," she said. "He's threatened to fire Jerome Powell. He started a bogus criminal investigation against him. He started a bogus investigation trying to fire Lisa Cook, and now he wants to appoint his man who's going to do exactly what he says at the Fed. That's a takeover."