Bessent says up to Trump whether Warsh might be sued over policy choices
By Michael S. Derby
Thu, February 5, 2026 at 6:07 PM UTC
3 min read
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By Michael S. Derby
Feb 5 (Reuters) - U.S. Treasury Secretary Scott Bessent on Thursday declined to commit that the Trump administration would not sue Kevin Warsh, its nominee to lead the Federal Reserve, if he follows a monetary path opposed by the president.
Senator Elizabeth Warren asked Bessent in a Senate hearing whether he would promise that "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."
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"That is up to the president," Bessent replied in a caustic exchange with the Massachusetts Democrat.
Bessent was responding to a question about comments made by Trump over the weekend in which the Republican president seemingly joked that he would sue Warsh if he did not cut interest rates should he be confirmed to replace Fed Chair Jerome Powell later this year. Asked about the comment, Trump later told reporters it was a joke.
While the president tried to brush the comment off as humor, it nevertheless came as he has been pressing a relentless pressure campaign on the Powell-led Fed to lower interest rates.
That effort has culminated in an unprecedented criminal investigation into the Fed that Powell said last month was in fact a pretext for attacking the U.S. central bank for not taking direct orders from Trump to set monetary policy.
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The Fed by law is charged to make monetary policy decisions independently, out of a widely-held view that policy set free of political interference better achieves the central bank's mandate of low and stable inflation and maximum sustainable job growth.
The Fed cut rates three times in 2025, lowering its benchmark policy rate by three-quarters of a percentage point to the 3.50%-3.75% range, as it sought to bolster a flagging job market amid hopes that inflation would continue to moderate.
Inflation remains above the Fed's 2% target, driven in part by Trump's substantial tariffs on imports.
WARSH CONFIRMATION FACES POSSIBLE BLOCK
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Trump last week named Warsh, a former Fed governor, as the successor to Powell, whose term as central bank chief ends in May. Trump has made it clear anyone he nominated for the post would need to act on his belief that interest rates must fall.
Trump said in an NBC interview that there's "not much" doubt Warsh shares his views that borrowing costs need to be lower, and he believes the Fed chief nominee wants that policy stance for his own reasons.
Warsh's dovish take on monetary policy has emerged as he campaigned for the top Fed job, and follows what had been his hawkish tenure as a Fed governor from 2006 to 2011, during the main phase of the global financial crisis. That shift has caused some observers to raise questions about Warsh's true position.
The current investigation into the Fed over issues around cost overruns involving a renovation of its headquarters in Washington also could affect how quickly Warsh might be confirmed by the U.S. Senate this year. Senator Thom Tillis, a Republican member of the Senate Banking Committee, has said he'll block any confirmation hearings until that legal matter is resolved. Senate Democrats have made similar demands.
"I actually like Warsh as a potential chair," Tillis noted during the hearing with Bessent on Thursday.
(Reporting by Michael S. Derby; Editing by Chizu Nomiyama and Paul Simao)