Scott Horsley

Well, we should say, first off, I guess that Trump told NBC he was not involved and didn't even know that the Justice Department was conducting this probe.

But there's not much question that Trump has used every weapon at his disposal to try to sway the Federal Reserve's decision-making, even though, as I said, it's supposed to operate independently of that kind of political pressure.

There certainly have been cost overruns on the headquarters project, but I've not heard any credible suggestion of any kind of wrongdoing associated with that.

That's because

You know, building costs have gone up in recent years and because they found a lot more asbestos and lead in this 1930s era building than they anticipated.

You know, the kind of cost overruns that typically go along with renovating a historic building.

It's probably not working the way that the administration would like.

I'll say that.

We've had a number of senators, both Democrats and some Republican senators, who have risen up in defense of Jerome Powell and the Fed's independence.

Most notably, North Carolina Senator Tom Tillis, who sits on the Senate Banking Committee, which oversees the Fed, has said he will not vote for any of Trump's Fed nominees until this matter is resolved.

And that could really jeopardize Trump's ability

to nominate someone he wants to replace Jerome Powell when the Fed chairman's term expires in May.

Whoever that nominee is, is probably going to need the support of Senator Tillis on the banking committee if he's going to clear that hurdle and wind up being Fed chairman.

So at least in the short term, there's been some backlash in the political world.

The financial world didn't really react to this very much.

And that was

A little bit of a surprise unless you think that the financial world is betting that Trump is not going to win this battle.

If the financial world thought that Trump really was going to be able to exercise control over the Fed, I think you would have seen a much bigger sell-off in the stock market and a bigger reaction in the bond market.

The financial world believes that the Fed will conduct itself and set interest rate policy on its own lights and not be subject to political pressure.

And if that sort of rock solid understanding is seriously monkeyed with, then you're going to see a very negative reaction in the financial market, I think.