US Treasury Secretary Scott Bessent on Monday called for a broad review of the Federal Reserve that goes beyond the current controversy over building renovations to assess its overall mission.
“What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” Bessent said on CNBC’s Squawk Box. “If this were the FAA with this many mistakes, we’d go back and look at why.”
His remarks came as tensions between the White House and the Fed escalate. It remains unclear what form such a review would take or who would carry it out.
Last week saw speculation that President Donald Trump was preparing to fire Fed Chair Jerome Powell, a legally contentious move that Trump later denied.
Bessent, seen as a potential successor to Powell and a mediator in the conflict, said: “President Trump solicits a whole range of opinions and then makes a decision. At the end of the day, it’s his call.”
Trump has been pressing the Fed to cut its benchmark rate sharply, but analysts believe policy direction is unlikely to change soon regardless of who chairs the central bank.
The administration has also criticized cost overruns on the Fed’s US$2.5 billion Washington renovation project, with officials planning site visits soon.
Meanwhile, Rep. Anna Paulina Luna has asked the Justice Department to investigate Powell over alleged misleading congressional testimony earlier this year. The Fed has not yet commented.
Bessent added that with inflation moderating, the Fed should consider further easing: “They were fearmongering over tariffs, but so far we’ve seen little inflation. I think they’re stuck in a mindset — all these PhDs, I don’t know what they do.”
The Fed last cut rates in December, completing a one-point easing cycle. Markets now expect another cut in September.
