US Treasury Secretary Scott Bessent has voiced his support for Federal Reserve Chairman Jerome Powell amidst ongoing criticism from within the Trump administration. Bessent stated he sees no justification for Powell’s removal, commenting, “There’s nothing that tells me that he should step down right now.” He further added that if Powell wishes to complete his term, which ends in May, he should be allowed to do so.
Powell has faced repeated criticism from President Donald Trump for maintaining stable interest rates. Trump believes the Fed should have continued cutting rates, citing concerns over the inflationary impact of the administration’s tariff increases. Recently, some Republicans have also criticised Powell regarding the expense of renovations to the central bank’s buildings. Trump has publicly stated his dissatisfaction with Powell’s performance, suggesting that Powell will be replaced soon.
Bessent also commented on the Federal Reserve’s broader activities, suggesting an internal review of its non-monetary functions, particularly the renovation project. He argued that the Fed has expanded its mission beyond monetary policy, leading to increased spending. According to Bessent, Powell has an opportunity to streamline the Fed’s non-monetary policy functions to benefit his legacy.
Bessent reiterated that monetary policy should be kept separate and handled with care. The Treasury Secretary’s remarks come as the Federal Reserve navigates a complex economic landscape and increasing political scrutiny. The Federal Reserve is the central bank of the United States. It provides the nation with a safe, flexible, and stable monetary and financial system.
