Treasury Secretary Scott Bessent was the one who stopped Trump from firing Powell

In a shocking turn of events, turns out Treasury Secretary Scott Bessent is the reason Jerome Powell still has a job today. While the White House was stirring chaos over the Federal Reserve chair, Scott stepped in behind the scenes, sat down with Trump, and made one thing clear: firing Powell would be a mess. And not the fun, ratings-friendly kind Trump likes, this one would backfire. Badly.

According to the Journal, Scott privately urged Trump to stay put, arguing that a high-profile showdown with the Fed chair, just ten months before Powell’s term ends, would do more harm than good. He laid out three points.

First, markets were stable, reacting well to Trump’s policies. Second, the Fed was already signaling two possible rate cuts this year. And third, firing Powell could trigger legal hell and a political fight that Trump doesn’t need during an election cycle.

Scott warned Trump about legal risks and GOP pushback

Trump had been toying with the idea of firing Powell for months. His frustration with the Fed was no secret. The president kept complaining that Powell was dragging his feet on interest rate cuts, which Trump believes are needed to reduce federal debt expenses.

But last week, it nearly escalated. A senior White House official told reporters that Trump had privately said he might go ahead and remove Powell. Hours later, Trump walked that back publicly, telling press he wasn’t planning to do so. But by then, the fire had already hit the markets.

Investors got spooked. Even the idea that a president might remove a Fed chair over a policy disagreement was enough to rattle confidence. And Scott knew it. So did Wall Street.

If Powell had been fired, the Fed’s independence would’ve been in serious doubt. The central bank has to make unpopular calls sometimes, and if its leader is seen as replaceable over policy differences, the whole structure begins to crumble.

But Scott didn’t just talk markets. He warned Trump that Powell wouldn’t go quietly. “If you fire him now, he’ll sue,” Bessent told the president, according to one person briefed on the conversation.

The lawsuit could last months, meaning Trump would get no benefit from the decision. Just headlines and headaches. And to be honest, he’s already getting a ton of that on his own anyway.

It doesn’t stop there. Firing Powell could leave the Fed leaderless. The Senate would need to confirm a new chair, but in August, most lawmakers aren’t even in D.C.

And even if they were, several Republican senators already made clear they oppose any attempt to remove Powell early. Senator John Thune told Fox News flat-out: “I think the markets want an independent Federal Reserve.” That kind of pushback could block any replacement Trump nominates.

And don’t forget who takes over if Powell leaves. The vice chair. Right now, that’s Philip Jefferson, a Biden pick and Powell ally. So Trump wouldn’t just lose a fight; he’d hand the keys to someone even less aligned with him. All of this is what Scott hammered home.

Other Trump officials want Powell out over office renovation costs

While Scott played defense, others in Trump’s camp are still looking for a way to push Powell out. Budget director Russell Vought is leading that charge. He’s focused on a $2.5 billion office renovation project that the Fed is overseeing.

The construction is behind schedule and over budget, and Vought is using that as ammo to build a case for “for cause” removal, a legal loophole that could sidestep the normal rules protecting Powell’s position.

As part of that effort, Trump recently placed three of his allies, including someone reporting to Vought, on a D.C. planning commission. That commission approved the Fed’s design plans back in 2021. Now they’re circling back, demanding site visits, and threatening audits.

Vought, when pressed, hasn’t denied that this could be a setup to boot Powell. But he’s been careful with his words, possibly to avoid drawing early legal challenges. Some advisers believe this construction saga could serve as grounds for firing Powell “for cause,” even though recent Supreme Court rulings have made that move harder to pull off.

Meanwhile, the Fed chair succession game has already started. Scott said last week that Trump is likely to get one or two picks early next year. It had seem, at some point, that the Treasury chief wanted the job for himself. But if WSJ’s report is to be believed, it was Scott who saved the global economy.

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