A senior economic adviser to Donald Trump has publicly downplayed the significance of a criminal investigation into Federal Reserve Chair Jerome Powell, suggesting there is likely "nothing to see." The comments from Kevin Hassett come as the unprecedented justice department probe sends shockwaves through the global financial community.
Escalating Attack on Central Bank Independence
The controversy erupted after it was revealed the US Department of Justice had served the Federal Reserve with grand jury subpoenas. This move marks a significant escalation in a long-running dispute between the Trump administration and the central bank. The investigation focuses on the multibillion-dollar renovation of the Fed's historic Washington headquarters and whether Jerome Powell lied to Congress about the project's scope during testimony last summer.
Powell has previously accused the administration of targeting him because the Fed resisted Trump's persistent demands for aggressive interest rate cuts. While Trump claims he was unaware of the investigation before it became public, his allies spent much of last year accusing the Fed of mishandling the costly renovations.
Hassett's Defence and Candidacy for Fed Chair
Kevin Hassett, who chairs Trump's National Economic Council, addressed the investigation in a Friday morning interview with Fox Business Network. Hassett is considered a leading contender to replace Powell when his term as Fed chair expires in May 2026.
"All corners of government – the Fed, the White House, everything – we have a responsibility to the American people to be transparent," Hassett stated. He expressed a wish that the Fed had been "more transparent" regarding Powell's congressional testimony on the renovations, which are central to the probe.
However, he offered a robust personal defence of Powell, saying: "Jay’s a good man – I expect that there’s nothing to see here, that the cost overruns were related to things like asbestos, as he says." Hassett added that, if offered the role of Fed chair, he would accept it with a firm commitment to "independence and transparency," an area where he believes the Fed "could have done better in the past."
Global Condemnation and Solidarity with the Fed
The justice department's investigation has provoked a fierce backlash from economic and financial institutions worldwide. In an extraordinary show of unity, every living former Fed chair issued a joint statement this week condemning the probe. They warned that similar prosecutorial attacks in other nations have led to "highly negative consequences" for living costs and argued such actions have "no place" in the United States.
Adding to the chorus of support, central banks around the globe released a rare joint statement expressing their "full solidarity" with Chair Powell and the Federal Reserve. This international condemnation underscores the severity with which the financial world views the threat to the Fed's operational independence, a cornerstone of modern economic policy.
Jeanine Pirro, the US Attorney for the District of Columbia leading the investigation, has insisted her office makes decisions "based on the merits." Nevertheless, the situation presents a major test for the institution's autonomy as the 2026 leadership change approaches.
