Treasury Secretary Bessent bashes Fed 'fear mongering' over tariffs and says central bank should be reviewed
Treasury Secretary Scott Bessent weighed in on the drama swirling around President Donald Trump and the central bank. Authorities should be looking into the Fed's efficacy, he said, when asked for his opinion on whether Trump should remove Fed Chair Powell from his post.
"I think that what we need to do is examine the entire Federal Reserve institution and whether they have been successful," Bessent said in a TV interview with CNBC on Monday. "We should think, 'Has the organization succeeded in its mission?' If this were the FAA, and we were having this many mistakes, we would go back and look at why has this happened," Bessent said.
Bessent also had issues with the Fed's reaction to Trump's tariffs. Speaking at a European Central Bank panel earlier this month, Powell previously said that the Fed would have cut rates already this year were it not for Trump's tariff policies.
"There was fear-mongering over tariffs, and thus far, we have seen very little, if any, inflation. We've had great inflation numbers. I think this idea of them not being able to break out of a certain mindset. All these PhDs over there — I don't know what they do," Bessent added of Fed economists.
Economists have warned that tariffs could raise inflation since Trump started his trade war earlier this year. Goods inflation has already started to drift higher, with the prices for durables rising 0.7% year-over-year in June, the second-straight month of growth after more than two years of annualized declines, according to the latest consumer price index report.
Fed drama
Bessent's comments add to the pressure campaign that's been waged against the central bank this year.
Dismayed at the lack of rate cuts from the Fed, Trump has bashed Powell and repeatedly called on the Fed to lower interest rates. He reportedly told Republican lawmakers last week he could fire Powell "soon," before denying that he had plans to oust him.
A separate report from The Wall Street Journal claimed that Bessent privately urged Trump not to fire the Fed Chair, pointing to the potential impact on markets. Bessent denied that he had a hand in talking Trump out of fired Powell.
"I'm not sure who the leaker was, but the problem with leakers is they only have partial information," Bessent said of the Journal's report. "President Trump solicits a whole range of opinions and then makes a decision. So he takes a lot of input and at the end of the day, it's his decision."
The Fed is also facing backlash from the Trump administration for its $2.5 billion building renovation, which Powell defended in a public letter to the director of the Office of Management and Budget last week.
"Chair Powell's term ends in May. There's also another seat coming up in January. So we'll see," Bessent said.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


NBC News
a few seconds ago
- NBC News
GOP push to rename Kennedy Center after Trump faces legal roadblock
House Republicans are proposing to rename the Kennedy Center after President Trump and its opera house after Melania Trump, but NBC News reports the plan would violate the center's founding law, which bans additional memorials after 1983.


NBC News
a few seconds ago
- NBC News
Marine Corps vet's wife released from ICE custody after advocacy from GOP Senator's office
A Marine Corps veteran's wife has been released from U.S. Immigration and Customs Enforcement detention following advocacy from Sen. John Kennedy, a Louisiana Republican who backs President Donald Trump's hardline immigration crackdown. Until this week, Mexican national Paola Clouatre had been one of tens of thousands of people in ICE custody as the Trump administration continues to press immigration officers to arrest 3,000 people a day suspected of being in the U.S. illegally. Emails reviewed by The Associated Press show that Kennedy's office said Friday that it put in a request for the Department of Homeland Security to release her after a judge halted her deportation order earlier that week. By Monday, she was out of a remote ICE detention center in north Louisiana and home in Baton Rouge with her veteran husband Adrian Clouatre and their two young children. Kennedy's constituent services representative, Christy Tate, congratulated Adrian Clouatre on his wife's release and thanked him for his military service. "I am so happy for you and your family," Tate wrote in an email to Adrian Clouatre. "God is truly great!" Kennedy's office proved "instrumental" in engaging with the Department of Homeland Security, according to Carey Holliday, the family's attorney. Kennedy's office did not provide further comment. Another Louisiana Republican, House Majority Leader Steve Scalise, also intervened recently with the Department of Homeland Security to secure the release of an Iranian mother from ICE detention following widespread outcry. The woman has lived for decades in New Orleans. Kennedy has generally been a staunch supporter of Trump's immigration policies. "Illegal immigration is illegal — duh," Kennedy posted on his Facebook page on July 17, amid a series of recent media appearances decrying efforts to prevent ICE officers from making arrests. In April, however, he criticized the Trump administration for mistakenly deporting a Maryland man. Senator's office requests mother's release from ICE custody The Department of Homeland Security previously told The AP it considered Clouatre to be "illegally" in the country. An email chain shared by Adrian Clouatre shows that the family's attorney reached out to Kennedy's office in early June after Paola Clouatre was detained in late May. Tate received Paola Clouatre's court documents by early July and said she then contacted ICE, according to the email exchange. On July 23, an immigration judge halted Paola Clouatre's deportation order. After Adrian Clouatre notified Kennedy's office, Tate said she "sent the request to release" Paola Clouatre to DHS and shared a copy of the judge's motion with the agency, emails show. In an email several days later, Tate said that ICE told her it "continues to make custody determinations on a case-by-case basis based on the specific circumstances of each case" and had received the judge's decision from Kennedy's office "for consideration." The next working day, Paola Clouatre was released from custody. "We will continue to keep you, your family and others that are experiencing the same issues in our prayers," Tate said in an email to Adrian Clouatre. "If you need our assistance in the future, please contact us." Back with her children Paola Clouatre had been detained by ICE officers on May 27 during an appointment related to her green card application. She had entered the country as a minor with her mother from Mexico more than a decade ago and was legally processed while seeking asylum, she, her husband and her attorney say. But Clouatre's mother later failed to show up for a court date, leading a judge to issue a deportation order against Paola Clouatre in 2018, though by then she had become estranged from her mother and was homeless. The Department of Homeland Security did not immediately respond to a request for comment on Clouatre's release. Adrian Clouatre said he wished the agency would "actually look at the circumstances" before detaining people like his wife. "It shouldn't just be like a blanket 'Oh, they're illegal, throw them in ICE detention.'" Reunited with her breastfeeding infant daughter and able to snuggle with her toddler son, Paola Clouatre told AP she feels like a mother again. "I was feeling bad," she said of detention. "I was feeling like I failed my kids." It will likely be a multiyear court process before Paola Clouatre's immigration court proceedings are formally closed, but things look promising, and she should be able to obtain her green card eventually, her attorney said. For now, she's wearing an ankle monitor, but still able to pick up life where she left off, her husband says. The day of her arrest in New Orleans, the couple had planned to sample some of the city's famed French pastries known as beignets and her husband says they'll finally get that chance again: "We're going to make that day up."


New York Times
a few seconds ago
- New York Times
Trump Admits Financial Penalties on Russia ‘May or May Not' Work
Just 24 hours after President Trump threatened Russia with financial penalties over the war in Ukraine, he seemed unsure on Tuesday about whether the strategy would even work. Speaking to reporters aboard Air Force One, Mr. Trump said that in 10 days, the United States may have to impose 'tariffs and stuff.' 'I don't know if it's going to affect Russia, because he wants to, obviously, probably keep the war going,' Mr. Trump said, referring to President Vladimir V. Putin. 'But we're going to put on tariffs and the various things you put on. It may or may not affect them. But it could.' Mr. Trump once suggested he could end the war in Ukraine by appealing to Mr. Putin, man to man. He tried to rewrite the history of Russia's invasion by casting Ukraine and its president, Volodymyr Zelensky, not as victims but as villains. But now, as Mr. Trump's frustration over the conflict grows, his threats have raised questions about how much leverage the United States has with Moscow — and whether Mr. Trump is willing to use it. 'Trump seems to be realizing what a lot of us observed from early on — that Zelensky is not the problem,' said Matt Duss, the executive vice president at the Center for International Policy. 'Ukraine is not the problem. Putin is the problem.' Mr. Trump 'obviously had great confidence in his own deal-making abilities,' Mr. Duss added, 'but reality seems to be hitting.' Want all of The Times? Subscribe.