Treasury Secretary Scott Bessent suggested a review of the Federal Reserve to examine its overall function, going beyond the current controversy over building renovations. The comments come amid an intensifying conflict between the White House and the central bank. Bessent backed the idea that the Fed should ease interest rates as inflation moderates, contrary to President Trump’s demands for a drastic rate cut.
Bessent’s remarks came after reports of a potential review of the Federal Reserve institution, with some suggesting it could be performed by the Treasury Secretary or another entity. The comments have sparked renewed tensions between the White House and the Fed, with President Trump denying any plans to fire Fed Chair Jerome Powell despite earlier reports.
The current controversy centers on the Fed’s renovation project in Washington, which has cost $2.5 billion, as well as Trump’s demand for a dramatic rate cut. Administration officials are planning to review the project in person soon. Meanwhile, Rep. Anna Paulina Luna is requesting an investigation into Powell at a criminal level over allegations of misleading testimony during congressional hearings.
Bessent acknowledged that President Trump solicits opinions and makes decisions, but also expressed skepticism about the Fed’s ability to accurately forecast inflation. The Fed last cut rates in December, which completed a brief easing cycle that brought the fed funds rate down a full percentage point. Market pricing suggests the Fed will likely cut rates again in September.
Source: https://www.cnbc.com/2025/07/21/treasury-secretary-bessent-calls-for-a-review-of-the-entire-federal-reserve.html