US Treasury chief says no reason for Fed chair to step down - Economy
Bessent's comments to Fox Business come as Powell faces growing pressure from Donald Trump's administration to slash interest rates, with the president recently ramping up attacks against the independent central bank chief over the Fed's $2.5 billion renovation project.
But Trump has said it was highly unlikely he would oust Powell before his tenure is up next year, and on Tuesday told reporters: "I think he's done a bad job, but he's going to be out pretty soon anyway."
Bessent added in his television interview, referring to Powell: "There's nothing that tells me that he should step down right now."
He noted that Powell's term as Fed chair ends in May 2026, and that Powell should see out his full term if he wants to.
But if the Fed chief wanted to leave early, he should as well, Bessent added.
Late Monday in a social media post, Bessent called for the Fed to conduct an "exhaustive internal review of its non-monetary policy operations," accusing the central bank of mission creep.
Bessent, in his post on X, said the Fed's "independence is a cornerstone of continued US economic growth and stability."
"However, this autonomy is threatened by persistent mandate creep into areas beyond its core mission," he added, without specifying which policy areas.
The Treasury chief had told CNBC earlier in the day that "what we need to do is examine the entire Federal Reserve institution and whether they have been successful."
Today in a CNBC interview, I called for a review of the Federal Reserve. It is my belief that the central bank should conduct an exhaustive internal review of its non-monetary policy operations. Significant mission creep and institutional growth have taken the Fed into areas that… — Treasury Secretary Scott Bessent (@SecScottBessent) July 21, 2025
On Tuesday, Fed Vice Chair for Supervision Michelle Bowman maintained in a CNBC interview that the central bank's independence in setting monetary policy is "very important."
The Fed has held interest rates steady this year as it monitors the effects of Trump's sweeping tariffs since returning to the White House, drawing ire from the president.
Trump has repeatedly cited mild inflation numbers as a reason the Fed should lower rates, arguing that the country would also pay less interest on debt coming due.
Trump said Tuesday that interest rates should be three percentage points lower.
But lower rates, while a boost to the economy, can also increase consumer prices.
Fed officials have been proceeding cautiously with rate cuts amid warnings that Trump's tariffs could fuel consumer price hikes and weigh on economic growth.
When mulling changes to the benchmark lending rate, officials seek to balance between reining in inflation and maintaining the health of the jobs market.
Policymakers expect to have a better understanding of how the levies impact the economy in the summer months.
The Fed holds its next policy meeting at month-end, and is widely expected to keep rates unchanged again.
Trump and other Republican allies have recently zoomed in on the Fed's headquarters renovation project as a potential avenue for Powell's ousting.
Follow us on:
Short link:
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al-Ahram Weekly
29 minutes ago
- Al-Ahram Weekly
El-Sisi sends message to Burkina Faso's Traoré as Egypt deepens West Africa outreach - Foreign Affairs
Egypt's Foreign Minister Badr Abdelatty delivered a message from President Abdel Fattah El-Sisi to Burkina Faso's transitional leader, Ibrahim Traoré, during a visit to Ouagadougou on Tuesday, part of Egypt's broader push to expand its political and economic footprint across West Africa. The letter, according to Egypt's foreign ministry, reaffirmed Cairo's commitment to strengthening bilateral ties and promoting regional security, particularly in the face of mounting threats from armed groups in the Sahel. Abdelatty, who is on a multi-country tour of West Africa, emphasized Egypt's readiness to deepen investment in sectors ranging from construction and energy to agriculture and pharmaceuticals. He was accompanied by a delegation of 30 business leaders from major Egyptian firms. Egypt is also courting diplomatic backing. Abdelatty expressed appreciation for Burkina Faso's support of Egypt's candidate for the United Nations Educational, Scientific and Cultural Organization (UNESCO) Director-General, Khaled El-Enany, framing the nomination as a pan-African endeavour. Traoré praised Egypt's support for African states and pledged to facilitate Egyptian business activity in Burkina Faso. He also reaffirmed his country's support for El-Enany's candidacy. In security discussions, Abdelatty highlighted Egypt's 'comprehensive' counterterrorism strategy, which he said includes development and religious outreach alongside military measures. He offered Egyptian support in building Burkina Faso's national capacity, citing Al-Azhar's educational efforts and its scholarship programme for Burkinabe students. For his part, President Traoré conveyed his greetings and appreciation to President El-Sisi, praising Egypt's historic role in supporting African nations. Burkina Faso marks the second stop on Abdelatty's five-nation tour, which includes Nigeria, Niger, Mali, and Senegal. The tour follows Egypt's active role in the 47th Ordinary Session of the Executive Council of the African Union (AU) earlier this month and comes amid regional shifts in security and diplomacy as Western alliances in the Sahel retreat. There, Abdelatty held talks with African leaders and AU officials to strengthen political ties, enhance trade, and promote investment, particularly in energy, construction, healthcare, and infrastructure. He also pushed for stronger African coordination on regional challenges. Counterterrorism topped the agenda in his meeting with the Economic Community of West African States (ECOWAS) Commissioner Abdel-Fatau Musah in Abuja, where Abdelatty called for a practical framework to deepen Egypt–ECOWAS cooperation against extremism. Follow us on: Facebook Instagram Whatsapp Short link:
Al-Ahram Weekly
29 minutes ago
- Al-Ahram Weekly
Third round of Ukraine-Russia talks expected in Turkey - War in Ukraine
Ukrainian and Russian officials could meet in Istanbul on Wednesday for a third round of peace talks, their first meeting in more than seven weeks amid US pressure to reach a ceasefire. Expectations of a breakthrough are low. The two sides previously met in May and June, but failed to agree an end to the nearly three-and-a-half year war. The Kremlin has not explicitly confirmed it will attend on Wednesday, but cautioned earlier not to expect any "miraculous breakthroughs" if it does. The two sides have wildly different positions for ending the conflict. Russia has called on Ukraine to effectively retreat from the four Ukrainian regions it claims to have annexed in September 2022, a demand Kyiv has called unacceptable. Ukraine has ruled out any negotiations on territory until after a ceasefire and says it will never recognise Russia's claims over occupied territory -- including Crimea, which Moscow annexed in 2014. Russia's full-scale invasion, launched in February 2022, has ravaged parts of eastern and southern Ukraine and resulted in tens of thousands of military and civilian deaths. Ukrainian President Volodymyr Zelensky said he hoped the two sides would discuss the release of prisoners and prepare a meeting between himself and Russian leader Vladimir Putin. Moscow has said that "a lot of work" is needed before even discussions can take place about possible talks between Putin and Zelensky, who last met in 2019. - 50 days - Ukraine said former defence minister and current security council secretary Rustem Umerov would head its delegation. The Kremlin said it would send political scientist Vladimir Medinsky to lead its negotiating team. Medinsky, who led the two previous rounds of negotiation, is not seen as a powerful decision maker and has been described by Ukraine as a puppet. At the last talks on May 16 and June 2, the two sides agreed to large-scale prisoner exchanges. They also exchanged their draft terms for ending the conflict, which the Kremlin said were "diametrically opposed". The potential talks come after US President Donald Trump last week gave Russia "50 days" to strike a peace deal with Ukraine or face bruising sanctions. Russia has intensified its bombardment of Ukrainian cities in recent weeks and claimed advances across several different areas of the front line. Turkey's President Recep Tayyip Erdogan last month called on both sides not to "shut the door" on dialogue. Follow us on: Facebook Instagram Whatsapp Short link:
Al-Ahram Weekly
29 minutes ago
- Al-Ahram Weekly
US to leave UNESCO, citing anti-Israel bias - International
The United States said Tuesday it would quit UNESCO, saying the UN cultural and education agency, best known for establishing world heritage sites, is biased against Israel and promotes "divisive" causes. President Donald Trump had already ordered withdrawal from the United Nations Educational, Scientific and Cultural Organisation once before, in 2017 during his first term. President Joe Biden then reestablished US membership. "Continued involvement in UNESCO is not in the national interest of the United States," State Department spokeswoman Tammy Bruce said. UNESCO called the US departure -- which it said will take effect in December 2026 -- regrettable, but unsurprising, and said its financial impact would be limited. "I deeply regret President Donald Trump's decision to once again withdraw the United States of America from UNESCO," Director-General Audrey Azoulay said, adding the move contradicted fundamental principles of multilateralism. "However regrettable, this announcement was expected, and UNESCO has prepared for it," she said. In recent years, Azoulay said, UNESCO had "undertaken major structural reforms and diversified our funding sources", including with private and voluntary governmental contributions. The US share of UNESCO's total budget currently stands at eight percent, she said. This compares to an estimate of nearly 20 percent a decade ago, according to a UNESCO source who asked not to be named. No staff redundancies were planned, Azoulay said. Bruce described UNESCO as working "to advance divisive social and cultural causes" and being overly focused on UN sustainability goals, which she described as a "globalist, ideological agenda". 'Same as seven years ago' Bruce also highlighted what she said was the body's anti-Israeli position in admitting Palestine as a state. "UNESCO's decision to admit the 'State of Palestine' as a member state is highly problematic, contrary to US policy, and contributed to the proliferation of anti-Israel rhetoric within the organisation," Bruce said. The administration has also objected to UNESCO's recognition of heritage sites in the occupied West Bank and east Jerusalem as Palestinian. Azoulay said the reasons put forward by the United States "are the same as seven years ago" although, she said, "the situation has changed profoundly, political tensions have receded, and UNESCO today constitutes a rare forum for consensus on concrete and action-oriented multilateralism". Washington's claims "contradict the reality of UNESCO's efforts", she added, "especially in the field of Holocaust education and the fight against antisemitism". The source at UNESCO described the US move as "purely political, without any real factual base". The organisation had already been "forced" to do without US money for several years after their departure in 2017, the source told AFP. UNESCO adapted but new sources of funding would still need to be found, the source said. 'Always welcome' Israeli Foreign Minister Gideon Sa'a r welcomed on X the US decision: "This is a necessary step, designed to promote justice and Israel's right for fair treatment in the UN system." "The United Nations requires fundamental reforms in order to remain relevant," he said. Israel's ambassador to the United Nations, Danny Danon, called UNESCO "an organisation that has lost its way" and praised the US for demonstrating "moral clarity in the international arena". French President Emmanuel Macron said on X that UNESCO had his "unwavering support" that would not weaken after the US departure. The UN organisation describes its mission as promoting education, scientific cooperation and cultural understanding. It oversees a list of heritage sites aimed at preserving unique environmental and architectural gems. Twenty-six world heritage sites are located in the United States. The UNESCO source said that the United States will continue to be represented on the world heritage committee even after leaving the organisation formally, just as it had in 2017. Trump was not the first to pull the United States out of UNESCO. President Ronald Reagan ended US membership in the 1980s, saying the agency was corrupt and pro-Soviet. The United States reentered under the presidency of George W. Bush. The American return under Biden was a major success for Azoulay, who became UNESCO chief in 2017, also because it included a pledge to pay back the US's contribution arrears to the tune of $619 million. On Tuesday, Azoulay said the United States could always return to the fold in the future. "The United States of America is and always will be welcome," she said. Follow us on: Facebook Instagram Whatsapp Short link:
