Treasury Secretary Defends Federal Reserve Probe and Touts New Child Savings Program

2026-01-29 economy

Washington D.C., Thursday, 29 January 2026.
Treasury Secretary Scott Bessent revealed 600,000 families applied for the new $1,000 investment accounts in just one week, while simultaneously defending the Justice Department’s unprecedented investigation into Federal Reserve Chair Jerome Powell.

From Tariff Checks to Market-Based Stimulus

The administration’s economic strategy has shifted focus from direct cash disbursements to long-term investment vehicles. While President Trump previously asserted executive authority to distribute tariff revenues directly to citizens—a proposal facing funding gaps as detailed in our previous coverage on Fiscal Policy and Trade Tariffs—the White House is now prioritizing the “Trump Accounts” initiative. Treasury Secretary Scott Bessent confirmed on Wednesday that the program, designed to provide $1,000 investment accounts to children born between January 1, 2025, and December 31, 2028, has already seen significant uptake [1][7]. Speaking at a Treasury Department summit on January 28, 2026, Bessent revealed that 600,000 families have applied for the accounts within the first week of the tax filing season by submitting IRS Form 4547 [5]. This figure represents approximately 2.4% of the estimated 25 million eligible families, marking a rapid initial adoption rate for the federally supported investment initiative [5].

“Minting New Capitalists”: The Trump Accounts Launch

The Trump Accounts program is positioned by the Treasury as a tool to “mint a new generation of capitalists” by ensuring widespread exposure to financial markets [5]. Under the plan, the initial $1,000 government contribution will be invested in an index fund, with the accounts compounding tax-free until the beneficiaries turn 18 [1][5]. To bolster the program’s capital base, major financial institutions including Bank of America and JPMorgan Chase announced on January 28, 2026, that they would contribute an additional $1,000 to accounts opened by their employees [4]. Furthermore, philanthropists Michael and Susan Dell have pledged to contribute $250 per child, while hedge fund manager Brad Gerstner has committed to donating to children under the age of five [1][4].

Central Bank Independence Under Scrutiny

Parallel to the rollout of fiscal stimulus, the Treasury Secretary addressed the escalating tensions between the White House and the Federal Reserve. The Department of Justice served the Federal Reserve with grand jury subpoenas earlier in January 2026, related to testimony given by Chair Jerome Powell in June 2025 [4]. When pressed on the investigation, Bessent stated that while he respects the concept of independence, “independence does not mean no accountability,” signaling the administration’s support for the probe [1]. This development comes as the President considers replacements for Powell, whose term expires in May 2026 [4].

Trade Tensions and Global Relations

The administration is also intensifying pressure on international trade partners. Secretary Bessent issued a stern warning to Canadian Prime Minister Mark Carney regarding the upcoming review of the Canada-United States-Mexico Agreement (CUSMA) scheduled for 2026 [2][6]. Referencing Carney’s recent speech at the World Economic Forum in Davos, Bessent cautioned the Prime Minister against “virtue signalling” and noted that Carney rose to power on an “anti-Trump message,” which he described as a disadvantageous position for negotiating with the U.S. economy [2][6]. Concurrently, the U.S. has imposed a 25% tariff on India for purchasing Russian oil and is raising tariffs on South Korea due to delays in ratifying a trade deal [5]. These moves underscore a combative trade stance as the administration seeks to renegotiate terms ahead of the CUSMA deadline [2].

Sources

Federal Reserve Fiscal Policy