In an interview on Friday, June 6th, Eastern Time, a series of remarks by US Treasury Secretary Bessent appeared to demonstrate allegiance to President Trump. Bessent refuted claims of a disagreement with Trump regarding dollar policy, reiterating that the core of the "strong dollar policy" is to create a robust economic foundation for the US currency. For the second consecutive day, he clarified recent comments by Trump threatening to prosecute Federal Reserve Chair nominee Kevin Warsh, repeatedly stating it was a "joke." On the subject of the Federal Reserve, Bessent echoed Trump's critical stance, hinting that the current Fed Chair, Powell, may be failing in his duties. Bessent emphasized that Trump deeply respects the Fed's independence and that Warsh would bring exceptional credibility and professional capability to the institution. This statement aimed to soothe market concerns about the central bank's autonomy. Powell's term is set to expire in May 2026 and he is currently under investigation by the Justice Department. During the interview, Bessent also highlighted the "Trump Account" plan, describing it as "potentially Trump's most significant political legacy." This initiative, designed to broaden stock ownership among Americans, would provide eligible newborns with a $1,000 seed investment for funds tracking indices like the S&P 500. Bessent's comments attracted market attention following recent volatility in the dollar's exchange rate. On January 27th, Trump stated he was not worried about dollar depreciation, calling its performance "great," after which the dollar index fell to its lowest level since 2022. Bessent's latest remarks sought to clarify the administration's official stance on dollar policy.
Strong Dollar Policy Aims to Create a Powerful Backdrop
When asked on Friday which recent statement—his or Trump's—was correct, Bessent called it a "false dichotomy." He explained that the "strong dollar policy" does not refer to currency intervention but to creating a powerful economic backdrop for the dollar through sound economic policies. "The core of a strong dollar policy is whether we are doing the things that create strong fundamentals for the dollar?" Bessent said. He pointed to the Trump administration's policies on taxes, trade, deregulation, energy, and "reasserting our sovereignty in critical minerals" as components of this approach. "Are we making the United States the best place in the world for capital? I think no one has done that better than President Trump," Bessent stated. This commentary attempted to bridge market confusion over the government's dollar stance. On January 28th, Bessent had stated the US "has always pursued a strong dollar policy" and affirmed the administration "absolutely would not" intervene in currency markets to support the yen, leading to a dollar rebound that day. This statement came just one day after Trump, on the 27th, responded "No, I think it's great" when asked if he was concerned about dollar weakness. Following Trump's remarks, the dollar accelerated its decline during late trading on the 27th, with the ICE US Dollar Index falling below 96.00 to under 95.60, hitting its lowest point since February 2022. Trump had also hinted at his ability to manipulate the currency, saying "I could make it go up and down like a yo-yo." However, he suggested this would not be advisable, comparing it to hiring unnecessary workers to boost employment figures, while criticizing certain Asian economies, including Japan, for what he perceived as attempts to devalue their currencies.
Senator Didn't Understand the Joke About Warsh
On Friday, Bessent reiterated his statement from Thursday's Senate hearing, characterizing Trump's rhetoric about "removing Fed Chair nominee Warsh" as a "joke." He stated that Warsh would bring outstanding credibility and expertise to the Fed and emphasized Trump's strong respect for the Fed's independence. During Thursday's hearing before the Senate Banking Committee, Democratic Senator Elizabeth Warren pressed Bessent to commit that Warsh would not face prosecution or Justice Department investigation for failing to cut interest rates as much as Trump desired. Bessent responded at the time, "That depends on the President." When Warren persisted, calling it a straightforward question, Bessent indicated those remarks were "jokes" and noted Trump had also joked about Warren, "which got a big laugh." Speaking to media on Friday, Bessent said, "I tried to explain to Senator Warren—who seems to have no sense of humor—that it was a joke." He did not repeat the assertion that whether Warsh would be prosecuted "depends on the President." This controversy stems from weekend reports. According to these reports, Trump stated at a Washington dinner that he would sue Warsh if he didn't lower interest rates. Trump had explicitly stated on Wednesday that Warsh would not have been nominated for Fed Chair if he had expressed a desire to raise rates. Warsh served as a Federal Reserve Governor from 2006 to 2011, maintaining a vigilant stance on inflation and often supporting higher interest rates during his tenure. However, in 2025, he shifted his tone, aligning with Trump's view that rates could be significantly reduced.
Powell May Be Incompetent
When mentioning Powell on Friday, Bessent stated that the Justice Department investigation found no criminal activity, but "it doesn't look good either, because they say the Chairman is incompetent." He concluded, "No crime, but perhaps incompetence." Bessent indicated that Acting Attorney General Pam Bondi would decide whether to continue the investigation into the Federal Reserve. Nearly four weeks ago, the US Justice Department launched an investigation into Powell, focusing on a $2.5 billion cost overrun for the renovation of the Fed's headquarters and whether Powell misled Congress about project details. Powell subsequently issued a statement suggesting the investigation was prompted because the Fed's interest rate decisions did not "follow the President's preferences." Trump stated on Monday that the investigation into Powell should be pursued "to the fullest extent." These statements have heightened market concerns about Fed independence. Several key senators, including Republican Thom Tillis of the Senate Banking Committee, have warned that Trump's nominees to the Fed will face heightened scrutiny. The Banking Committee, which handles Fed nominations, has a narrow Republican majority with 13 seats compared to Democrats' 11 seats.
"Trump Account" Could Become Political Legacy
Bessent stated on Friday that the "Trump Account" could become Trump's most significant political legacy. Bessent said, "I think children born last year and in the coming years, when these accounts begin to mature 18 years from now... perhaps the individuals and every family that receives these accounts will be able to create something for themselves." The "Trump Account" is a plan aimed at expanding stock ownership among Americans, forming a key part of the "Great Beautiful Act." According to details disclosed by the US Treasury, the plan would establish investment accounts for children born between 2025 and 2028. The government would make a one-time $1,000 seed deposit for eligible newborns, with funds primarily directed towards index funds tracking major US stock indices. According to calculations by the White House Council of Economic Advisers, assuming an average annual growth rate of 10.5% for the S&P 500, this $1,000 seed investment could grow to approximately $600,000 by the beneficiary's retirement age. Under a high-return scenario, if families maximize annual contributions with private funds, the account could be worth over $300,000 when the child turns 18, and potentially exceed $1 million by age 28. On December 17, 2025, Bessent noted that 38% of Americans still do not own any stocks, and the plan's goal is to reduce this percentage to zero. The Treasury Department clarified that the measure is not intended to replace the social security system but to supplement it, allowing more Americans to directly participate in the distribution of value created by corporations. The plan utilizes a flexible funding structure, incorporating funds from federal appropriations, business owners, philanthropists, and state governments. The annual individual contribution limit is $5,000, and employers can contribute up to $2,500 to an employee's child's account. The program is expected to officially open for its first round of funding after July 4, 2026.