In a pointed critique of the Federal Reserve, Treasury Secretary Scott Bessent has openly challenged the leadership of Chair Jerome Powell, calling for a comprehensive evaluation of the institution's performance.
During an interview with CNBC, Bessent expressed his concerns about the Fed's bureaucratic expansion and its deviation from its foundational objectives. He emphasized the necessity of scrutinizing the entire Federal Reserve system to assess its effectiveness. "What we need to do is examine the entire Federal Reserve institution and whether they have been successful," Bessent remarked.
Drawing a parallel to the Federal Aviation Administration, he added, "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."
According to Gateway Pundit, Bessent's criticism extended to the Fed's insular mindset and its flawed forecasts regarding tariffs and inflation. He accused the institution of fear-mongering over tariffs, noting the absence of significant inflationary impacts. "They were fear-mongering over tariffs, and thus far we have seen very little, if any, inflation. Weve had great inflation numbers," Bessent stated.
He further questioned the intellectual rigidity within the Fed, saying, "I think this idea [is] of them not being able to break out of a certain mindset. All these Ph.D.s over there, I dont know what they do."
In a subsequent statement on X, Bessent reiterated his demand for a thorough audit of the Federal Reserve, focusing not only on monetary policy but also on the institution's expanding influence and spending. He highlighted the risks posed by the Fed's mission creep, which could undermine its independence.
"Today in a CNBC interview, I called for a review of the Federal Reserve. It is my belief that the central bank should conduct an exhaustive internal review of its non-monetary policy operations," Bessent asserted. He warned that the Fed's autonomy is at risk due to its encroachment into areas beyond its primary mission, which could lead to unwarranted criticism and threaten its independence.
Bessent also questioned the rationale behind the Fed's extensive building renovations on Constitution Avenue, especially given the institution's reported operating losses exceeding $100 billion annually. He urged the Fed to conduct a thorough review of its decision-making processes, particularly in light of these financial challenges.
"While I have no knowledge or opinion on the legal basis for the massive building renovations being undertaken on Constitution Avenue, a review of the decision to undertake such a project by an institution reporting operating losses of more than $100 billion per year should be conducted," he stated.
The Treasury Secretary called for the Fed to extend its regular reviews of monetary policy to include a comprehensive evaluation of its entire mission. He argued that such a review would enhance the Fed's credibility and reinforce its commitment to guiding the nation's monetary policy.
"The Fed does regular reviews of its monetary policy framework. I would urge Fed leadership to similarly undertake, publish and implement a comprehensive institutional review across its entire mission to buttress its credibility," Bessent concluded. His remarks underscore the need for accountability and transparency within the Federal Reserve, aligning with conservative principles of limited government and fiscal responsibility.
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