Scott Bescent is calling for a full review of the expanding role of the Federal Reserve, warning that “creep obligations” and controversial spending could threaten independence. With Trump increasing pressure and Powell under the fire, debate over Fed priorities and accountability has entered a new phase.
US Treasury Secretary Scott Bescent rekindled scrutiny of the Federal Reserve and encouraged a deeper review of activities beyond monetary policy. His sharp criticism, shared in X’s post, warns that increased involvement in central banks’ non-core functions could threaten their independence.
The expanding role of the Fed sparks debate
Bescent’s remarks come at a time when political pressure on the Federal Reserve is intensifying. He described the Fed’s monetary policy as a “jewel box.” It is a delicate instrument that is important for US economic stability, but it argued that reaching a wider region led to a “creep obligation.”
“The Fed’s autonomy is threatened by sustained delegation sneaking into realms beyond its core mission,” warned Bessent.
His comments sparked new debates about the Fed’s priorities, financial decisions, and broader implications for the US economic future.
Controversy over $2.5 billion renovation
One of Bescent’s major concerns was the $2.5 billion headquarters renovation project of the Federal Reserve system in Washington, DC, which was approved by President Donald Trump in 2017. The project has since attracted acute criticism over cost overruns and scope.
President Trump labelled the project as potentially fraudulent and called for the Fed to resign from Chairman Jerome Powell. Bessent stopped just before the legal assessment, but during the period of financial burdens and operating losses at the Fed, it questioned the optics of such costly upgrades.
Powell’s position is safe – for now
Despite criticism, Powell’s work appears safe. Thanks to the recent Supreme Court ruling, the clarification of the Fed’s chairman is not a disagreement in policy, but only to be removed “for the cause.” His current term will last until May 2026.
In response to the backlash, Powell defended renovations as needed, citing infrastructure degradation, safety upgrades, and removal of hazardous materials.
Meanwhile, Bescent, considered a possible successor to Powell, asked whether he advised Trump to fire the chair. He said such a decision would ultimately depend on the president.
- Read again:
- Federal Housing Directors Show Powell’s Possible Resignation That Will Happen soon
- ,
Broader appeal for monitoring and efficiency
Speaking to CNBC, Bessent elicited similarities between the recent Fed’s failures and operational errors seen in agencies like the FAA. He questioned whether central banks really function efficiently despite their “doctoral and Ivy League talent.”
“This is the FAA and if we had made so many mistakes, we would go back and see why,” he pointed out.
What’s next for the Fed?
As debate intensifies, Bessent’s call for accountability could mark a turning point in how the Federal Reserve is seen as a powerful institution that must operate within defined boundaries, rather than just a way that is considered a policymaker.
