U.S. Treasury Secretary Scott Bessent escalated his criticism of the Federal Reserve on Friday, urging sweeping reforms and accusing the central bank of driving inflation and inequality while President Donald Trump weighs successors to Fed Chair Jerome Powell.
Bessent Calls For Overhaul Of Fed’s Powers
In an op-ed for The Wall Street Journal that was published on Friday, Bessent called for a “nonpartisan review” of the Fed, including its authority to set interest rates, regulatory functions and internal operations.
He argued that the Fed should leave bank supervision to other agencies and abandon bond purchases outside of emergency conditions.
“The Fed must change course,” Bessent wrote, adding that its policies “enriched the rich at the expense of the poor” and contributed to the U.S. housing affordability crisis.
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Donald Trump Floats Powell Replacements
Meanwhile, Trump has told reporters that his Treasury chief was on a shortlist of four candidates to replace Powell when his term expires in May 2026. Bessent quickly said he was not interested, reported Reuters.
Trump has also mentioned National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh and current Fed Governor Christopher Waller as potential nominees.
Previously, it was reported that Bessent was heading the effort to find a new Federal Reserve chair after Trump’s continued push for the central bank to cut interest rates.
Bessent began interviewing candidates to succeed Powell on Friday, the publication noted, citing a source familiar with the matter.
Trump has long been critical of Powell, whom he appointed in 2018 and has pressured the Fed to lower rates more aggressively. The President has also been moving to oust Fed Governor Lisa Cook over alleged mortgage fraud, which she denies.
Beige Book Signals Slower Rate Cuts
The Fed’s latest Beige Book, released Sept. 3, painted a picture of flat economic activity across the country. While acknowledging household struggles with wages and prices, the report dampened expectations of an aggressive 50-basis-point rate cut in September.
Craig Shapiro, macro strategist at The Bear Traps Report, noted on X, formerly Twitter, that the cautious tone suggests a “slower rate cutting cycle,” contrasting with Trump’s calls for deeper and faster cuts.
Federal Reserve Prepares For October Conference
The U.S. Federal Reserve will host a payments innovation conference on Oct. 21, focusing on the merging of traditional and decentralized finance.
The event will also cover stablecoins, AI in payments and tokenized financial products.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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