US Treasury’s Bessent says Federal Reserve needs to be examined as an institution

WASHINGTON - U.S. Treasury Secretary Scott Bessent on Monday said the entire Federal Reserve needed to be examined as an institution and whether it had been successful.

Bessent, speaking with CNBC, declined to comment on a report that he had advised President Donald Trump not to fire Fed chair Jerome Powell, saying it would be the president's decision. But he said the institution should be reviewed, citing what he called "fear-mongering over tariffs" despite the emergence thus far of little, if any, inflationary effect. "I think that what we need to do is examine the entire Federal Reserve institution and whether they have been successful," Bessent said, adding that he would give a keynote speech at the U.S. central bank on Monday evening at the start of a regulatory conference.

"If this were the (Federal Aviation Administration) and we were having this many mistakes, we would go back and look at why. Why has this happened?" he said. "All these PhDs over there, I don't know what they do."

Trump has railed repeatedly against Powell and urged him to resign because of the central bank's reluctance to deliver interest-rate cuts. In recent days the president has also taken aim at a $2.5 billion renovation at the Fed's Washington headquarters that has exceeded its budget, suggesting there could be fraud involved and it might be a reason to oust Powell.

Powell last week responded to a Trump administration official's demands for information about cost overruns on the project, saying it was large in scope and involved a number of safety upgrades and hazardous materials removals.

Bessent declined to be drawn on predictions that U.S. financial markets could crash if Powell was ousted.