Bessent accuses Powell of 'politicizing' central bank
US treasury secretary Scott Bessent accused Federal Reserve chair Jerome Powell on Wednesday of “politicizing” the institution as the Trump administration intensified its pressure campaign on the central bank.
President Donald Trump has railed against Powell for not moving faster to lower interest rates, and the Department of Justice (DoJ) this month launched a criminal investigation into Powell – a move former Fed chairs labeled an effort to undermine the central bank’s independence.
Bessent on Wednesday criticized Powell’s decision to attend a supreme court hearing on Trump’s attempt to fire Fed Governor Lisa Cook, calling his presence “a political statement.”
Bessent said on the sidelines of the World Economic Forum in Davos, citing allegations Cook has denied:
I am not sure why Chair Powell would go and support Governor Cook when the Fed has not undertaken an examination of whether she did in fact commit mortgage fraud.
The Fed should not be politicized. He is politicizing the Fed.
Trump has centered his attempt to remove Cook, the first Black woman to serve on the central bank’s board of governors, on mortgage fraud allegations.
Cook has challenged the removal attempt, and the supreme court has allowed her to remain in her post until it hears her case. She has not been charged with a crime.
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Adam Schiff, a US senator, is expressing alarm in a letter to the Departments of Veterans Affairs (VA) and Homeland Security (DHS), following a report from the Guardian that revealed the VA was gathering data on its “non-citizen” workforce.
The VA told the Guardian some of the information gathered could be shared with other agencies for immigration enforcement purposes.
“The request for non-citizen data,” Schiff said in a letter sent on Wednesday, “can be viewed only as a thinly veiled effort to instill fear within the VA community, which will likely be used to conduct immigration enforcement efforts.
“These intimidation tactics waste critical time and resources for VA personnel that are already stretched thin,” he added.
The Guardian reported last December on the VA’s plans, citing a leaked memo that outlined a massive data-gathering operation of all non-citizens who are “employed or affiliated with” the agency, which employs 450,000 people and enjoys affiliations with most major medical schools.
Veteran advocates and members of Congress say the sweeping language would likely also include people who work at VA contractors, medical students and even volunteers.
According to the memo, the report was to be presented to Douglas Collins, VA secretary, on 30 December. The current status of the report is unclear, according to congressional sources familiar with the VA’s internal operations.
The VA is the nation’s largest integrated healthcare system, serving 9 million veterans annually.
Since the Guardian’s first report, the VA has vehemently defended its practice.
You can read the full story from José Olivares and Aaron Glantz here: US senator calls veterans affairs’ data collection of non-citizen workers ‘thinly veiled effort to instill fear’
Trump lands in Switzerland for Davos summit
US president Donald Trump has landed in Switzerland for the World Economic Forum (WEF), according to Agence-France Presse (AFP).
An airplane with “United States of America” plastered down the fuselage has touched down at Zurich airport in the last few minutes.
Trump flew towards Davos behind schedule, after a problem with Air Force One delayed the president by about three hours.
He is due to address WEF on Wednesday afternoon, but his treasury secretary Scott Bessent previously suggested the president was “likely to be three hours late”.
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The Kremlin said on Wednesday that more clarity was needed on what Donald Trump meant when he spoke of the US possessing a “secret sonic” weapon it had used during its capture of Venezuela’s Nicolás Maduro.
Trump said in an interview with NewsNation that “nobody else” had the weapon, which he said was used when Washington seized Maduro earlier this month.
Asked about Trump’s remarks, Kremlin spokesperson Dmitry Peskov said Russia has special services tasked with collecting and analysing information and that those services were doing their job.
Trump treasury secretary brands Denmark ‘irrelevant’
Graeme Wearden tracks the latest world business, economic and financial news in our daily liveblog
Donald Trump’s treasury secretary has dismissed Denmark as “irrelevant” in his administration’s latest attack on a traditional US ally, as world leaders in Davos prepare for the president’s arrival in the Swiss ski resort.
Speaking on the sidelines of the World Economic Forum, Scott Bessent brushed aside claims that European investors, such as Denmark’s pension funds, might pull out of the market for US government debt in retaliation for Trump’s attempt to annex Greenland.
The size of Denmark’s investment in US Treasury bonds, like Denmark itself, is irrelevant.
It is less than $100m[£75m]. They’ve been selling treasuries for years. I’m not concerned at all.
He blamed the “fake news media led by the Financial Times” for amplifying a Deutsche Bank report that suggested Europe might be less willing to keep buying US government debt, amid the crisis over ownership of the Arctic island.
Bessent told reporters that the CEO of the German bank had called to say it does not stand by the findings of the report.
You can read the full report from Graeme Wearden here: Trump treasury secretary brands Denmark ‘irrelevant’ as Greenland row deepens
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US president Donald Trump’s special envoy Steve Witkoff said he would meet Russian president Vladimir Putin on Thursday.
Witkoff told CNBC in an interview, referring to Putin:
Well, look, we have to go meet him on Thursday.
But it’s the Russians who are asking for that meeting. I think that’s a significant statement on their part.
The Kremlin said last week it was preparing to welcome Witkoff and Trump’s son-in-law Jared Kushner to Moscow for peace talks on Ukraine, but that no dates had been set.
Lauren Aratani is a reporter for Guardian US
Trump’s bid to remove Cook last summer marked the first time in US history that a president fired a sitting Fed governor. She was appointed by Joe Biden in 2022, becoming the first woman of color to serve on the Fed’s board. Her term is set to be completed in 2038, as Fed governors serve at 14-year terms.
The administration has alleged that Cook committed mortgage fraud by misrepresenting multiple properties as her primary residence to get a better mortgage rate – an accusation which initially came from Bill Pulte, a close Trump ally and head of the Federal Housing Finance Agency, who has instigated similar investigations against others, including New York attorney general Letitia James and Democrat senator Adam Schiff.
Cook’s lawyers have accused the administration of “cherry-picking” information, and argued that Cook accurately listed her property on other loan documents. The discrepancy the administration is focused on is an “isolated notation”, they have said.
Beyond the accused mortgage fraud, Cook’s lawyers are arguing that Fed governors can only be fired “for cause”, and that the Fed governor was denied due process in violation of the US constitution’s fifth amendment.
You can read the full report from Lauren Aratani here: US supreme court to consider Trump’s bid to fire Lisa Cook from Fed board
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US supreme court to consider Trump’s bid to fire Lisa Cook from Fed board
Hello and thank you for joining us on the US politics live blog.
The US supreme court will hear oral arguments over Donald Trump’s bid to fire a Federal Reserve governor on Wednesday morning, as his administration continues its extraordinary campaign for control over the central bank.
Trump tried to fire Lisa Cook in August over apparent discrepancies on mortgage applications his officials claim are evidence of fraud.
It was the first time in 112 years that a president had sought to remove a Fed governor.
A federal court blocked Cook’s removal, and she remains on the Fed’s rate-setting board. The Trump administration is waging an unprecedented battle with the Fed over interest rates, after policymakers defied the president’s repeated calls for drastic cuts.
Meanwhile, the Department of Justice (DoJ) has been widely criticized this month for launching a criminal investigation into Jerome Powell, the US central bank’s chair. While it is pursuing Powell over renovations to the Fed’s historic office buildings in Washington DC, he has argued he is being targeted for not “following the preferences of the president”.
Powell plans to attend Wednesday’s hearing at the supreme court in person, according to reports.
Trump as president has enjoyed wielding seemingly unlimited power from the executive branch, including allowing the so-called Department of Government Efficiency to fire tens of thousands of federal workers and defund programs across the government.
But this case is set to test his limits. Last spring, supreme court justices briefly mentioned the supreme court in an unrelated ruling around two labor officials Trump had fired. “The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” they wrote.
Legal experts believe that the note suggests, softly, that the court may give special protections to the Fed, and its officials, that are not granted to other government agencies.
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