Treasury Secretary Scott Bessent has reportedly voiced his discontent regarding the decision to initiate a criminal investigation into Federal Reserve Chair Jerome Powell. Sources indicate that Bessent is concerned that this investigation could adversely affect financial markets. He has previously cautioned President Donald Trump that dismissing Powell could also lead to market volatility, although this did not appear to occur following the announcement of the investigation.

The inquiry, which has received bipartisan criticism since its disclosure, focuses on Powell's testimony before Congress concerning a $2.5 billion renovation of the Federal Reserve's headquarters in Washington, D.C. In response to the investigation, Powell released a video statement asserting that the probe is a result of his ongoing disagreements with the President regarding interest rate policies.

Bessent's frustrations were initially reported by Axios, which noted that he informed Trump that the investigation had created significant complications. Some officials within the administration have claimed that the Department of Justice's actions are not politically motivated and emphasized that further investigation into Powell's statements is necessary.

The renovation project has been a point of contention between Trump and Powell, with Trump previously suggesting that Powell was not effectively managing the Federal Reserve. Russell Vought, the Director of the Office of Management and Budget, has accused Powell of legal violations related to government oversight and misleading Congress about the renovation details.

The announcement of the investigation has elicited strong reactions from some members of Congress. Republican Senator Thom Tillis stated he would oppose any Federal Reserve nominees until the legal issues surrounding Powell are resolved. Other Republican senators, including John Kennedy and Lisa Murkowski, have expressed skepticism about the investigation's motivations, with Murkowski characterizing it as an attempt at coercion by the Trump administration.

Despite the political turmoil, initial market reactions were muted, with the Dow Jones Industrial Average closing higher, indicating a potential resilience in investor sentiment amidst the uncertainty surrounding the Federal Reserve's leadership.