Overview
- Treasury Secretary Scott Bessent told the Senate Banking Committee it would be up to President Trump whether to sue or direct a Justice Department investigation of Fed chair nominee Kevin Warsh if he resists cutting interest rates.
- Bessent characterized Trump’s Alfalfa Club remark about suing Warsh as a joke, drawing a sharp exchange with Sen. Elizabeth Warren, who pressed for assurances that Warsh would not face legal threats over rate decisions.
- Warren challenged the administration’s affordability claims, citing Bureau of Labor Statistics data showing grocery prices were 2.4% higher at the end of 2025, while Bessent pointed to declines in some items such as eggs.
- The hearing unfolded as the DOJ investigates Chair Jerome Powell over testimony related to the Fed’s headquarters renovation, with Sens. Tim Scott and Thom Tillis saying they do not see criminal intent and Tillis vowing to block Warsh until the probe ends.
- The session was part of Bessent’s testimony on the FSOC annual report, where he warned against overregulation and said the council is using artificial intelligence to spot emerging financial risks.