U.S. Treasury Secretary Scott Bessent has called for a review of “the entire” Federal Reserve that would look at the central bank’s function within the American economy and markets.
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“What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” said Bessent during an interview on CNBC. “Has the organization succeeded in its mission? If this were the (Federal Aviation Administration) and we were having this many mistakes, we would go back and look at why has this happened.”
The comments come amid an intensifying conflict between the White House and the Federal Reserve as U.S. President Donald Trump continues to demand that the central bank lower interest rates. It was not clear what form a review would take or who would perform such a look into the Fed.
Firing the Fed Chair?
Last week saw conflicting reports over whether President Trump planned to fire Federal Reserve Chair Jerome Powell before his current term expires in May 2026. Reports from the White House indicated a move was forthcoming, but Trump denied he is planning what would be a legally questionable move that would most certainly throw financial markets into a downward spiral.
Bessent has been at the center of the Fed controversy. He is viewed as both a potential successor at the central bank and is reported to be serving as a mediator between Trump and Powell. There have been reports that Bessent has discouraged Trump from firing Powell, though the president denies such claims.
On the question of interest rates, Bessent said on CNBC that the Fed should be easing monetary policy with inflation mostly contained. “They were fear mongering over tariffs, and thus far we have seen very little, if any, inflation,” said the Treasury Secretary. The Fed last cut interest rates in December 2024, and is expected to remain on hold again at its next policy meeting on July 30.
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