The already tense relationship between the White House and the Federal Reserve spilled into the open at the World Economic Forum on Wednesday, with Treasury Secretary Scott Bessent issuing a sharp rebuke of Fed Chairman Jerome Powell.
Speaking to reporters from the “USA House” in Davos, Bessent accused the central bank chief of “politicizing” the institution. The criticism centers on reports that Powell intends to appear at a Supreme Court hearing regarding President Donald Trump’s efforts to remove Federal Reserve Governor Lisa Cook.
Cook is currently facing allegations of mortgage fraud, which the administration has cited as grounds for her ousting. Bessent argued that Powell’s decision to stand by Cook publicly is inappropriate given the unresolved nature of the claims.
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“I am not sure why Chair Powell would go and support Governor Cook when the Fed has not undertaken an examination of whether she did in fact commit mortgage fraud,” Bessent told the press. He characterized the planned appearance as “a political statement,” adding emphatically, “The Fed should not be politicized. He is politicizing the Fed.”
The Federal Reserve declined a request for comment regarding Bessent’s remarks.
A Tangle of Allegations
The friction in Davos is the latest flashpoint in a series of legal and regulatory battles involving the Fed’s leadership.
The scrutiny on Governor Cook began in August 2025, when Federal Housing Finance Agency (FHFA) Director Bill Pulte publicly alleged that Cook had manipulated residency statuses. In a post on X, Pulte claimed Cook designated an out-of-state condo as her primary residence only two weeks after taking a loan on her Michigan home, where she also declared primary residency.
Pulte stated that his agency had referred the matter to the Department of Justice (DOJ), warning in September that the alleged conduct was damaging the “integrity of the Federal Reserve.”
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Cook’s legal team has aggressively denied any wrongdoing. In a November 2025 letter to Attorney General Pam Bondi, her lawyers stated there was “no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud,” according to reports from PBS News.
Powell Under Fire
The attack on Powell comes as the Chairman faces his own legal hurdles. Earlier in January, the DOJ opened a criminal investigation into Powell following a referral from Republican Rep. Anna Paulina Luna. The probe concerns allegations that Powell perjured himself during testimony before the Senate Banking Committee regarding renovations to the Fed’s Washington, D.C. headquarters.
Powell, whose term is set to expire in May 2026, broke his silence on the matter in a video statement released Sunday. He dismissed the perjury inquiry as a “pretext” for a broader political objective: pressuring the central bank to lower interest rates.
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“I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law,” Powell stated. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Powell insisted the investigation was not about congressional oversight or building renovations, but rather an attempt to “manipulate” the bank’s monetary policy.
President Trump has frequently called for aggressive rate cuts in recent months, a point of contention that appears to be deepening as legal battles surrounding the Fed’s top officials move toward the Supreme Court.
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