US Treasury director demands review of Fed over ‘many mistakes’
(MENAFN) US Treasury Secretary Scott Bessent has called for a comprehensive review of the Federal Reserve, questioning whether the central bank has effectively fulfilled its role given what he describes as numerous mistakes. Although he did not detail the specific errors, Bessent highlighted the Fed’s opposition to President Donald Trump’s tariff policies, which Fed Chair Jerome Powell warned could increase inflation and unemployment.
Speaking to CNBC on Monday, Bessent emphasized the need to evaluate the Federal Reserve’s overall performance, comparing it to an agency like the Federal Aviation Administration, where repeated mistakes would trigger an investigation. He did not specify how such a review would be conducted or who would lead it.
Bessent criticized the Fed for what he called “fear-mongering” over tariffs, noting that inflation has remained low despite those concerns. He also questioned the value of the Fed’s economists, saying, “All those PhDs over there, I don’t know what they do.”
Defending Trump’s tariff approach, Bessent described the president as a “high-functioning executive” with a strong grasp of economic strategy. He argued that tariffs have pressured other countries into negotiating more favorable trade deals with the US.
In April, Trump imposed a 10% tariff on most trade partners, with higher rates targeting China, Mexico, Canada, and the EU. Additional tariffs followed, framed as efforts to improve trade terms, boost domestic manufacturing, protect jobs, reduce the deficit, and support tax cuts. While some trade partners resisted and some tariffs were paused, most have entered talks for relief and new agreements.
Trump has consistently maintained that tariffs do not drive inflation and has criticized the Fed and Chair Powell for not lowering interest rates, which he says increases debt costs. In June, consumer prices rose 0.3% month-to-month, resulting in an annual inflation rate of 2.7%, matching forecasts. Using these numbers, Trump renewed his call for the Fed to ease monetary policy, posting on Truth Social: “Consumer Prices LOW. Bring down the Fed Rate, NOW!!!” He has also argued that the president should have more influence over interest rate decisions and has repeatedly urged Powell to resign.
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