Treasury Secretary Bessent Calls for Fed Investigation Amid Criticism

Key facts

• Treasury Secretary Scott Bessent publicly urged an investigation into the Federal Reserve's operations.
• Bessent questioned whether the Federal Reserve has fulfilled its mandate.
• He accused the Fed of 'fear-mongering' regarding President Trump's tariffs.
• Bessent criticized the Fed's economists for intellectual rigidity.
• The call for an inquiry occurs amid tension between the Trump administration and Fed Chair Jerome Powell.
• Other Trump officials have criticized Powell over interest rate policy and a $2.5 billion Fed renovation project.

Treasury Secretary Scott Bessent has sharply escalated criticism of the Federal Reserve, publicly calling for a comprehensive investigation into the central bank's operations and effectiveness. In a CNBC interview, Bessent questioned whether the Fed has fulfilled its mandate, likening the proposed inquiry to safety reviews in other major agencies.

Bessent accused the Federal Reserve of "fear-mongering" over President Trump's tariffs on imported goods, stating that inflation has remained low despite warnings. He also expressed frustration with the central bank's economists, suggesting they are "unable to break out of a certain mindset."

The Treasury Secretary's demand for an inquiry comes amid growing discord between the Trump administration and Fed Chair Jerome Powell. Many Trump officials have openly criticized Powell, particularly regarding his reluctance to cut interest rates and the Fed's $2.5 billion renovation of its Washington D.C. headquarters. Republican lawmakers have also made a criminal referral against Powell, alleging false statements to Congress about the renovation.

President Trump has consistently pressed the Fed to lower interest rates, arguing that its hesitancy has harmed the economy. While Trump has recently downplayed speculation about removing Powell, Bessent emphasized the need to investigate the broader institution rather than just its leadership. Bessent previously confirmed that the White House was in the process of selecting Powell's successor.