US Treasury chief says Fed's performance must be examined
Fed Chair Jerome Powell's term ends in May 2026, but Trump has recently targeted the Fed's US$2.5 billion renovation project as a potential justification for removing him.
The fresh criticism follows months of attacks on Powell for keeping interest rates steady this year, despite Trump's push for aggressive cuts to offset the economic impact of his tariffs.
Asked whether he supported firing Powell, Bessent told CNBC: 'I think that what we need to do is examine the entire Federal Reserve institution and whether they have been successful.'
Bessent added he would speak later Monday on regulatory issues, another area in which the Fed plays a key role, one day before the opening of a Fed-hosted conference.
He did not respond to a Wall Street Journal report claiming he had privately advised Trump against firing Powell, citing risks to financial markets, economic stability and the legal hurdles such a move would face.
Bessent told CNBC there had been 'very little, if any, inflation' from Trump's sweeping tariffs and suggested Fed officials 'appear unable to break out of a certain mindset.'
Since returning to office in January, Trump has imposed a 10 per cent tariff on goods from most trading partners and higher duties on imports of steel, aluminium and automobiles.
While inflation has remained muted so far, partly because Trump delayed some of the harshest measures, economists say price data over the summer will offer clearer insight into the tariffs' full impact.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
an hour ago
- CNA
US says it won't rush trade deals ahead of August deadline, will engage China
WASHINGTON: The Trump administration is prioritising the quality of trade agreements over meeting a looming deadline, US Treasury Secretary Scott Bessent said on Monday (Jul 21), as countries scramble to avoid steep new tariffs set to take effect on Aug 1. 'We're not going to rush for the sake of doing deals,' Bessent told CNBC. Asked whether the deadline could be extended for countries engaged in talks, he said it would be up to President Donald Trump. 'If we somehow boomerang back to the August 1 tariff, I would think that a higher tariff level will put more pressure on those countries to come with better agreements,' he said. Trump has roiled global markets with sweeping tariff threats targeting most major US trading partners. But his administration has fallen short of securing deals with many countries, including India, the European Union and Japan, where negotiations have proven more difficult than anticipated. WHITE HOUSE, EU RESPONSE White House press secretary Karoline Leavitt said Trump may raise trade during talks with Philippine President Ferdinand Marcos Jr at the White House on Tuesday. She said the US remained engaged with governments globally and could announce new deals or issue more tariff notifications before the deadline, but offered no further details. Meanwhile, European Union diplomats said the bloc was considering broader counter-measures amid dimming prospects for a deal. Germany and other EU countries are weighing the use of 'anti-coercion' tools that could restrict US access to public tenders or target services. 'The negotiations over the level of tariffs are currently very intense,' said German Chancellor Friedrich Merz. 'The Americans are quite clearly not willing to agree to a symmetrical tariff arrangement.' CHINA TALKS, JAPAN AND INDIA On China, Bessent said talks would resume 'in the very near future.' 'Trade is in a good place,' he said, adding that future discussions could focus on Beijing's continued purchases of sanctioned Iranian and Russian oil, and its excess capacity in sectors such as steel. 'The elephant in the room is this great rebalancing that the Chinese need to do.' Bessent also said he would encourage Europe to follow the US if it implements secondary tariffs on Russia. Japan's top trade envoy Ryosei Akazawa arrived in Washington on Monday for his eighth visit in three months. His trip comes after Prime Minister Shigeru Ishiba's ruling coalition suffered a setback in upper house elections, in part due to voter frustration over US tariffs. Bessent, who returned from a visit to Japan on Sunday, said Washington was focused on securing the best deal for Americans, not Japan's domestic political dynamics.
Straits Times
2 hours ago
- Straits Times
US Marines ending Los Angeles deployment, Pentagon says
Find out what's new on ST website and app. WASHINGTON - The Pentagon announced on July 21 it was ending its deployment of some 700 active-duty Marines sent to Los Angeles in June to protect federal property and personnel during a spate of protests tied to President Donald Trump's immigration crackdown. The withdrawal follows last week's decision to remove about half of the 4,000 National Guard troops also sent to Los Angeles. 'With stability returning to Los Angeles, the Secretary has directed the redeployment of the 700 Marines whose presence sent a clear message: Lawlessness will not be tolerated,' said Pentagon spokesperson Sean Parnell. Mr Trump deployed the Marines and California National Guard troops to Los Angeles in June, against the wishes of Democratic Governor Gavin Newsom, to quell protests triggered by immigration raids on workplaces by Immigration and Customs Enforcement agents. Despite legal challenges, a US appeals court let Mr Trump retain control of California's National Guard. Mr Trump's decision to send troops into Los Angeles prompted a national debate about the use of the military on US soil and inflamed political tension in the country's second-most-populous city. The Pentagon has defended the deployment, saying that safeguarding Immigration and Customs Enforcement agents ensures they can do their jobs, and praised the Marines on July 21. Top stories Swipe. Select. Stay informed. Singapore Subsidies and grants for some 20,000 people miscalculated due to processing issue: MOH Asia At least 19 killed as Bangladesh air force plane crashes at college campus Singapore ST Explains: What does it mean for etomidate to be listed under the Misuse of Drugs Act? Business Why Singapore and its businesses stand to lose with US tariffs on the region Singapore NTU to have compulsory cadaver dissection classes for medical students from 2026 World US authorities probing passenger jet's close call with B-52 bomber over North Dakota Singapore Jail for man who conspired with another to bribe MOH agency employee with $18k Paris trip Singapore New research institute will grow S'pore's talent in nuclear energy, safety 'Their rapid response, unwavering discipline, and unmistakable presence were instrumental in restoring order and upholding the rule of law,' Mr Parnell said. Mr Trump has vowed to deport millions of people in the country illegally and has executed raids at work sites including farms that had been largely exempted from enforcement during his first term. The administration has faced dozens of lawsuits across the country challenging its tactics. Mr Trump has increasingly turned to the military in his immigration crackdown. In addition to sending troops to Los Angeles, thousands of active-duty troops have been deployed to the border with Mexico, and the Pentagon has created military zones in the border area. The zones are intended to allow the Trump administration to use troops to detain migrants without invoking the 1807 Insurrection Act that empowers a president to deploy the US military to suppress events such as civil disorder. REUTERS
CNA
4 hours ago
- CNA
Harvard challenges Trump administration in court over cancelled research funding
BOSTON: Harvard University on Monday (July 21) urged a federal judge to order US President Donald Trump's administration to restore about US$2.5 billion in cancelled research grants and stop efforts to cut off additional federal funding to the Ivy League institution. The court hearing before US District Judge Allison Burroughs in Boston stretched more than two hours but ended without a ruling. The case marks a high-stakes flashpoint in the administration's broader push to reshape US higher education through funding leverage. DOJ DEFENDS FUNDING CANCELLATION Michael Velchik, a senior lawyer for the US Justice Department, argued the cancelled grants reflected a government priority to stop supporting institutions that "tolerate antisemitism". 'Harvard prioritized campus protestors over cancer research,' Velchik said, while asserting the matter should be handled by the US Court of Federal Claims, which hears monetary disputes. The administration said Harvard's rejection of an April list of demands triggered a wave of cancellations, including the suspension of hundreds of research grants. It accused the university of failing to adequately respond to reports of antisemitic harassment on campus. RESEARCH AT RISK Harvard, based in Cambridge, Massachusetts, says the funding cuts threaten hundreds of research projects, including those focused on cancer, infectious diseases and Parkinson's. Steven Lehotsky, a lawyer representing Harvard, said the administration was using antisemitism as a pretext for broader ideological retaliation. "The administration has given no consideration to patients, the public at large, and the harm of all this research being cut off," Lehotsky told the court. JUDGE QUESTIONS LEGAL BASIS Judge Burroughs expressed scepticism over the government's assertion that it could cancel grants on broad policy grounds without a formal process. "That's a major stumbling block for me," she said, adding that if funding could be cut over issues related to speech, the constitutional consequences would be 'staggering.' Burroughs, an Obama appointee, has already barred the administration from ending Harvard's ability to host international students in a separate case. She is expected to issue a written ruling in the funding case in the coming weeks. GOVERNANCE DEMANDS SPARKED CONFLICT The administration's push to defund Harvard followed its refusal to comply with demands issued in an April 11 letter by a White House task force. The letter called for sweeping changes including governance restructuring, revised admissions and hiring practices to ensure ideological diversity, and the termination of select academic programmes. Harvard has said the demands overstepped legitimate concerns about antisemitism and aimed instead to control academic speech, in violation of First Amendment protections. University President Alan Garber said the cuts could cost the school nearly US$1 billion annually, forcing layoffs and hiring freezes. The amount includes the cancelled multi-year federal research grants. TAX PENALTIES ADDED TO PRESSURE As part of Trump's spending and tax legislation, the Republican-led Congress also raised the federal excise tax on Harvard's US$53 billion endowment income from 1.4 per cent to 8 per cent. Endowment income accounts for 40 per cent of Harvard's operating budget. Garber said the school has taken steps to support Jewish and Israeli students who faced 'vicious and reprehensible' treatment following the outbreak of war between Israel and Hamas in October 2023. But he maintained that the administration's measures extended far beyond the issue of antisemitism and amounted to unconstitutional interference in Harvard's academic independence.
