GOP, Former Feds Rebuke Fed Probe, Bessent: Probe "Made a Mess," More

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Stephanie Flanders 0:00
Donald Trump is rewriting the Washington rulebook and reshaping the global economy. If you're trying to connect the dots behind the headlines, Bloomberg's Trumponomics podcast is here to help. I'm Stephanie Flanders, Head of Government and Economics at Bloomberg. Every week I'll bring you a smart, focused conversation with reporters and experts from Washington, Wall Street and beyond. Listen to new episodes every Wednesday and follow Trumponomics wherever you listen.
Amy Morris 0:30
News when you want it with Bloomberg News Now. I'm Amy Morris. Three former heads of the Federal Reserve and four former Treasury secretaries decried a Department of Justice investigation into current Fed Chair Jay Powell, saying it would undermine the U.S. central bank's independence. The statement was signed by former Fed Chairs Janet Yellen, Ben Bernanke and Alan Greenspan. and former Treasury Secretaries Tim Geithner, Jacob Lew, Henry Paulson, and Robert Rubin. Republican Senators Lisa Murkowski and Kevin Cramer also expressed opposition to the probe, with Murkowski calling it an attempt at coercion. Bloomberg's Tyler Kendall.
Tyler Kendall 1:07
It does appear that Powell is talking with these senators in real time. Senator Lisa Murkowski, a Republican from Alaska, confirmed she spoke with him earlier this morning, and she's now suggesting that Congress could launch its own investigation into the Department of Justice's investigation.
Amy Morris 1:22
Republican Representative French Hill of Arkansas released a statement calling the charges against Powell a distraction. And Treasury Secretary Scott Besson reportedly told President Trump late yesterday that the probe into Fed Chair Powell made a mess and would be bad for financial markets. Axios reports U.S. Attorney Jeanine Pirro's office launched the probe without warning, with no heads up for Treasury, the White House or the main Justice Department. Sources tell Bloomberg Federal Housing Finance Agency Director Bill Pulte was a driving force behind that decision to subpoena the Federal Reserve.
Bill Pulte 1:57
Pulte denies it. Obviously, I would never talk about anything that the president and I talk about. I would say this, that the president is laser focused on housing affordability and reversing what has happened these last four years.
Amy Morris 2:09
FHFA chief Bill Pulte was a guest on Bloomberg surveillance. In Bloomberg's Michael McKee reports, the Trump administration may be trying to pressure Powell not to stick around.
Mike McKee 2:19
Powell has been... very circumspect about what his plans are for the future he has refused to say whether he would resign as a governor in part i think to keep his leverage over the administration as it tries to push him to cut interest rates more bloomberg's mike mckee the ranking democrat on the senate banking committee senator elizabeth warren says every president would like low interest rates in election years but donald trump's war on the federal reserve is doing worldwide damage the
Elizabeth Warren 2:50
The Fed has been the gold standard for monetary policy decision making. And Donald Trump is burning that to the ground. And that's going to be costly for the United States over a very long arc if Trump gets away with this.
Amy Morris 3:05
Senator Elizabeth Warren speaking at the National Press Club. She also says she supports Trump's move to cap credit card interest rates at 10 percent a year.
Elizabeth Warren 3:14
He said that during the election.

What is the significance of the DOJ investigation into Fed Chair Jay Powell?

Elizabeth Warren 3:15
And I said, let's go. I'm ready. And where's President Trump been? Missing in action. All of a sudden, Trump is starting to wake up to the fact that people across this country are more alarmed about their economic circumstances than they were a year ago.
Amy Morris 3:31
Senator Warren will be a guest on Balance of Power tonight at 5 Wall Street time. Stocks, bonds and the dollar bounced from session lows, but caution prevailed after the Trump administration escalated its attack on the Fed. We check markets for you all day long here at Bloomberg. The S&P 500 up a quarter percent. NASDAQ up a half percent. The Dow a little changed on the upside. Ten-year Treasury yield at 4.18 percent.

How are former Fed leaders responding to the DOJ probe?

Amy Morris 3:54
The two-year yield at 3.54 percent.

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