Bessent says Trump's comment about suing his Fed chair nominee was a joke

• Trump made the controversial comment at a Washington dinner over the weekend regarding his Fed chair nominee Kevin Warsh and interest rate cuts
• Bessent told CNBC that Senator Warren 'seems to have no sense of humor' and failed to recognize the president's remark as a joke
• The Treasury Secretary stressed Trump's 'great respect for the Fed, for the Fed's independence' despite the controversial comment

Summary:

U.S. Treasury Secretary Scott Bessent clarified that President Donald Trump's weekend comment about potentially suing Federal Reserve chair nominee Kevin Warsh over interest rates was made in jest. The remark, delivered at a Washington dinner, suggested Trump could take legal action if Warsh failed to lower rates once confirmed.

During a Senate Banking Committee hearing on Thursday, Senator Elizabeth Warren questioned Bessent about the statement. In a subsequent CNBC interview on Friday, Bessent emphasized the comment was clearly a joke, stating he "tried to explain to Senator Warren...who seems to have no sense of humor, that it was a joke."

Key Points:

• Treasury Secretary Bessent defended Trump's controversial remarks as humorous
• Trump had suggested he could sue Fed nominee Kevin Warsh if rates aren't lowered
• Comment occurred during a Senate Banking Committee hearing on February 5, 2026
• Bessent reiterated that "the president has great respect for the Fed, for the Fed's independence"

Market Implications:

The incident highlights ongoing tensions regarding Federal Reserve independence and presidential influence over monetary policy. While Bessent's clarification attempts to reassure markets about respecting Fed autonomy, Trump's initial comment—even if joking—underscores the administration's desire for lower interest rates. Such statements can create uncertainty around the Fed's ability to make independent policy decisions, potentially affecting market confidence in the central bank's operational independence. The exchange also reflects the politically sensitive nature of Fed leadership appointments and monetary policy direction under the Trump administration.