photo Treasury Secretary Scott Bessent
the staff of the Ridgewood blog
Washington DC, Treasury Secretary Scott Bessent signaled Monday that it may be time for a sweeping review of the Federal Reserve—beyond the current controversy over costly renovations—to examine whether the central bank is truly fulfilling its mission.
In an interview on CNBC’s Squawk Box, Bessent raised concerns about the Fed’s overall performance, suggesting the institution’s effectiveness deserves closer scrutiny.
“What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” Bessent said. “If this were the FAA and we were having this many mistakes, we would go back and look at why this happened.”
White House vs. Federal Reserve: Tensions Rise
Bessent’s remarks come amid an intensifying rift between the White House and the Fed.
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President Donald Trump has repeatedly pressured the central bank to slash interest rates, but Fed Chair Jerome Powell has signaled no drastic moves are coming.
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Conflicting reports last week suggested Trump was considering firing Powell—an unprecedented and legally questionable move—but the president later denied any imminent decision.
Bessent has been at the center of the controversy, both as a potential successor at the Fed and as a key mediator reportedly urging Trump not to oust Powell.
“President Trump solicits a whole range of opinions and then makes a decision,” Bessent said. “At the end of the day, it’s his call.”
Costly Fed Renovations Spark More Criticism
Adding fuel to the fire is the $2.5 billion renovation of two Federal Reserve buildings in Washington, D.C.
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The administration has accused the Fed of cost overruns and poor management.
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Officials are reportedly planning an in-person inspection of the project soon.
Meanwhile, Rep. Anna Paulina Luna (R-FL) has formally requested the Justice Department investigate Jerome Powell for allegedly misleading Congress about changes to a product discussed during hearings earlier this year.
Interest Rates and Inflation Concerns
On monetary policy, Bessent backed the idea that the Fed should consider easing interest rates, arguing that fears over tariffs and inflation have been overstated.
“They were fear-mongering over tariffs, and so far we’ve seen little, if any, inflation,” he said. “We’ve had great inflation numbers, but the Fed seems stuck in a mindset. All these Ph.D.s over there—I don’t know what they do.”
The Treasury Secretary noted that inflation has moderated, creating room for the Fed to be more flexible on rates.
What Could a Federal Reserve Review Look Like?
It’s unclear how far a potential review of the Fed might go or who would conduct it.
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Would it focus solely on management and accountability, or delve deeper into the central bank’s policy-making process?
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Could it pave the way for structural reforms or even leadership changes at the Fed?
For now, Bessent has only floated the idea—but it underscores the growing political pressure on the Federal Reserve as it balances its dual mandate of controlling inflation and supporting economic growth.
What’s Next?
With White House tensions escalating, Powell under legal and political fire, and economic policy debates heating up ahead of the 2024 elections, the future of the Federal Reserve’s independence could be at stake.
Will Bessent’s push for a Fed-wide review gain momentum—or is this just the opening shot in a larger battle over U.S. monetary policy?
The white house needs to stop messing with Fed policy. Fed independence is critical to a stable economy.
It can do nothing about Fed policy, except complain, as you can – and SHOULD.