Treasury Secretary Scott Bescent proposed a review of the Federal Reserve on Monday that goes beyond the current controversy over the renovation of the building and examines its overall functionality.
“All we need to do is look at the whole Fed and whether they were successful,” Bessent said in an interview with CNBC’s “Squawk Box.” “Has the organization succeeded in that mission? If this is (the Federal Aviation Administration) and we had so many mistakes, we’ll go back and see why this happened.”
Comments come amidst the fierce conflict between the White House and the central bank. It was not clear what form the review would take or who would do it.
Last week, conflicting reports were seen as to whether President Donald Trump is preparing to fire Speaker Jerome Powell. Reports from the White House showed that the movement was approaching, but Trump quickly denied that he was preparing to become a legally questionable manipulation.
Bescent is at the heart of the controversy as a potential successor to the Fed, with both reports pointing to the Treasury Secretary as a mediator trying to discourage Trump from banishing Powell.
“President Trump will seek all the opinions and then make a decision,” Bescent said when asked about the Wall Street Journal report, which he helped persuade Powell to stay. “So he’s taking a lot of input and at the end of the day it’s his decision.”
Trump has called for the Fed to dramatically lower the benchmark late borrowing rate.
Additionally, the recent administration has made roughly $2.5 billion renovations for two Washington buildings, criticizing COD for its cost overruns.
Management reportedly plans to watch the project in person immediately.
In related developments, Rep. Anna Paulina Luna on Saturday called for the Justice Department to investigate Powell at a criminal level about what Florida Republicans lied to Congress. Powell explained the product changes during a February Congress hearing in a way that the executive authorities claimed to be misleading. CNBC reached out to the Fed for comment.
On the issue of interest rates, Bescent supported the idea that the Fed should probably ease the inflation is largely easing.
“They were threatening to hit tariffs and so far we had little to see inflation,” Bescent said. “We had a huge inflation count, so you know, I think it is this idea that they can’t get out of a certain way of thinking.
The Fed completed a short mitigation cycle in December, reducing its final cut rate and lowering the Fed’s funds to full points. But it’s even higher as the Fed eased mortgage rates and both Treasury yields increased.
Market pricing indicates that the Fed will likely be cut again in September.
