Bessent calls on Fed to do comprehensive review of its mission

Treasury Secretary Scott Bessent on Monday called on the Federal Reserve to do an institution-wide review of whether it is achieving its mission, as the administration steps up pressure on Chair Jerome Powell.

“What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” Bessent said on CNBC. “If this were the [Federal Aviation Administration] and we were having this many mistakes, we would go back and look at why has this happened.”

“They were fear-mongering over tariffs, and thus far we have seen very little, if any, inflation,” he added. “We’ve had great inflation numbers. So, you know, I think this idea [is] of them not being able to break out of a certain mindset. All these Ph.D.s over there, I don’t know what they do.”

In a post on X later on Monday, he clarified that he was calling on the central bank to conduct such a review.

“While I have no knowledge or opinion on the legal basis for the massive building renovations being undertaken on Constitution Avenue, a review of the decision to undertake such a project by an institution reporting operating losses of more than $100 billion per year should be conducted,” he said in the post. “The Fed does regular reviews of its monetary policy framework. I would urge Fed leadership to similarly undertake, publish and implement a comprehensive institutional review across its entire mission to buttress its credibility.”

The administration has been turning up the heat on Powell, who has held interest rates steady this year and is expected to keep borrowing costs the same at the central bank’s rate-setting meeting next week. Powell argues that the Fed can be patient as it waits to see how tariffs affect the economy, given that they could both boost inflation and lower growth.

There were early signs that tariffs have begun pushing up prices in the Consumer Price Index data for June, although annual inflation is still below 3 percent.