In a week when rumors swirled that Donald Trump was preparing to fire Federal Reserve Chair Jerome Powell, markets wobbled and speculation surged on Capitol Hill. Yet it wasn’t bombast that carried the day, but restraint. And that restraint came in the form of Treasury Secretary Scott Bessent.
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While Trump once again toyed with removing Powell before his term expires, Bessent moved quietly. He didn’t bring drama or headlines. He brought a clear, strategic case against confrontation. And behind closed doors, he gave the president something he values; control without chaos.
Stop the Fight Before It Starts
According to reporting by The Wall Street Journal, Bessent privately urged Trump not to fire Powell. He argued there was no need to do so, especially with the Fed signaling that rate cuts were already on the horizon. With the markets holding, the economy stable, and the president already touting those gains, Bessent made the case that picking a public fight could backfire.
According to people familiar with the matter, Bessent pointed out that Fed officials have signaled they may cut interest rates twice before year’s end. If Powell delivers that, a public feud becomes pointless and potentially costly.
Lay Out the Legal Reality
Bessent also walked Trump through the legal maze a premature firing would trigger. The Wall Street Journal previously reported that he and Commerce Secretary Howard Lutnick had warned Trump about the risks earlier this year, when the president floated the idea of firing Powell publicly.
This time, Bessent explained that if Trump removed Powell before May, the Fed chair could sue. That lawsuit could drag into spring, potentially lasting longer than Powell’s remaining term. The fight would achieve nothing, except disruption.
On top of the legal risks, Senate opposition could stall confirmation of any replacement. Even some Republican senators have voiced concerns. That would leave Vice Chair Philip Jefferson, a Biden appointee and close Powell ally, temporarily in charge. Trump could lose control of the Fed without removing its direction.
Focus on the Wins Ahead
Bessent emphasized what Trump stood to gain by waiting. Two major vacancies are coming up: Powell’s term ends in May, and Governor Adriana Kugler’s term ends in January. Trump can fill both next year, reshaping the central bank without a public spectacle.
The strategic patience appealed to the White House. Trump later downplayed the episode on Truth Social, writing, “Nobody had to explain that to me. I know better than anybody what’s good for the Market, and what’s good for the U.S.A.” But he didn’t fire Powell.
The restraint spoke louder than the post.
Watch the Other Hand
Not everyone in the administration has taken Bessent’s cautious approach. According to the Wall Street Journal, White House budget director Russell Vought has been leading an effort to pressure Powell over the ballooning costs of the Fed’s $2.5 billion renovation project. The Fed has attributed overruns to material inflation and construction delays, but critics see an opening.
Vought’s team has floated the idea that Powell’s handling of the project could justify a “for cause” removal. Trump has installed allies, including one of Vought’s advisers, on a local planning commission that once approved the Fed’s renovation plans. The administration has even requested a site visit, which the Fed offered, though the timing didn’t work and it’s being rescheduled.
This pressure campaign, also reported by The Wall Street Journal, could serve as a potential predicate for action if Trump changes his mind.
Keep the Replacement in Play
Meanwhile, Trump is actively weighing potential successors. According to earlier WSJ reporting, Kevin Hassett, a former White House economic adviser, is the frontrunner. Others are under quiet consideration as well, including some whose names haven’t surfaced publicly.
Trump may announce his choice as early as September. That would send a strong message to the markets, satisfy his desire to assert control, and avoid the blowback of firing Powell outright.
“There are a lot of great candidates and we will see how rapidly it progresses,” Bessent said last week in an interview with Bloomberg Television. “It’s President Trump’s decision and it will move at his speed.”
Score One for Restraint
For now, the Fed chair remains in place, and the administration avoids a self-inflicted crisis. Bessent offered a cleaner path forward, one rooted in timing, legality, and strategy. In an administration often driven by confrontation, he made the case for control through patience.
Trump may still want a more compliant Fed, but Bessent showed him how to get there without a fight. And that, for now, was enough.
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