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NBC News
5 minutes ago
- Business
- NBC News
Treasury Secretary Bessent calls for a review of 'the entire' Federal Reserve
Treasury Secretary Scott Bessent on Monday suggested a review of the Federal Reserve that would go beyond the current controversy over building renovations and look at its overall function. 'What we need to do is examine the entire Federal Reserve institution and whether they have been successful,' Bessent said during an interview on CNBC's ' Squawk Box.' 'Has the organization succeeded in its mission? 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.' The comments come amid an intensifying conflict between the White House and the central bank. Last week saw conflicting reports over whether President Donald Trump was preparing to fire Fed Chair Jerome Powell. Reports from the White House indicated a move was forthcoming, but Trump soon after denied he is readying what would be a legally questionable maneuver. Bessent has been at the center of the controversy, both as a potential successor at the Fed as well as reports pointing to the Treasury chief as a mediator looking to discourage Trump from ousting Powell. 'President Trump solicits a whole range of opinions and then makes a decision,' Bessent said when asked about a Wall Street Journal report that he had helped convince Trump to stay his hand on Powell. 'So he takes a lot of inputs, and at the end of the day it's his decision.' Trump has demanded the Fed dramatically lower its benchmark overnight borrowing rate, something that appears unlikely regardless of the chair. In addition, the administration in recent days has criticized the Fed for cost overruns at the $2.5 billion renovation it has undertaken for two of its buildings in Washington. Administration officials reportedly are planning soon to view the project in person. On the question of interest rates, Bessent backed the idea that the Fed probably should be easing with inflation mostly moderating. 'They were fear mongering over tariffs, and thus far we have seen very little if any inflation,' Bessent said. '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 PhDs over there, I don't know what they do.' The Fed last cut rates in December, which completed a brief easing cycle that brought the fed funds rate down a full percentage point. However, as the Fed eased both mortgage rates and Treasury yields moved higher. Market pricing indicates the Fed probably will cut again in September.
CNN
8 minutes ago
- Business
- CNN
Bessent: The Trump administration should look into the Fed's ‘many mistakes'
Treasury Secretary Scott Bessent said Monday he believes the Federal Reserve system should be reviewed for potentially holding back the US economy, which is 'on the cusp' of growth that could equal the dot-com boom seen in the 1990s. 'I think that's what the paradigm or the mental model for everyone should be here,' he told CNBC's 'Squawk Box' Monday morning. 'In the '90s we finally had the productivity growth kick in from the IT revolution. And I would say that we are on the cusp of that right now,' Bessent said. He said leaders in the US tech sector he met with at a recent conference in Sun Valley, Idaho, told him they believe 'the AI revolution is coming much faster than they thought, and could start kicking in as soon as the first or second quarter of 2026.' Because AI could require fewer human resources, Bessent believes this economic boom could come without reignited inflation. When asked how the country should prepare for such a boom, Bessent said: 'If the inflation numbers are low, then we should be cutting rates.' The Federal Reserve has not lowered its benchmark interest rate since December, angering President Donald Trump, who has demanded that Fed Chair Jerome Powell do so. (The central bank is an independent agency that works outside of political influence, and Powell is one member of a 12-person committee that votes on interest rates.) When asked if Trump should fire Powell, Bessent said 'I think what we need to do is examine the entire Federal Reserve institution and whether they have been successful.' 'I think that we should think, has the organization succeeded in its mission? If this were the [Federal Aviation Administration] and we were having this many mistakes, we would go back and look at why this has happened.' While Powell has said the central bank is waiting for more economic data in order to ascertain the impact of Trump's economic agenda — especially his aggressive trade policy — Bessent said there has been 'fear mongering over tariffs' and that the nation has so far seen 'very little, if any inflation.' 'All these PhDs over there, I don't know what they do. This is like universal basic income for academic economists.' The latest inflation readings show that US consumer price increases heated back up in June, rising to their highest level in four months. 'Tariffs are starting to bite,' Heather Long, chief economist at Navy Federal Credit Union, told CNN in an interview. June wholesale-level inflation was unchanged from May. Trump appointed Powell as Fed chair in 2018 and former President Joe Biden reappointed him in 2022. His four-year term at the helm of the Fed ends in May next year, though his tenure as governor continues until 2028. Trump has in recent weeks ramped up his distaste for Powell, calling for his 'termination' and even brandished a document last week that he said was a letter firing Powell, in a meeting with Republican lawmakers. However, Trump has stopped short of taking any overt moves to remove the Fed chair. Last week, he said it was 'highly unlikely' that he would fire Powell. Such unprecedented action would ricochet through global markets and trigger a lengthy legal challenge, as well as severe economic consequences that would backfire on Trump's desire for lower rates, economists previously told CNN. However, Bessent said last week that the Trump administration has begun the formal process of selecting Powell's replacement, months earlier than is traditional for such a decision. 'I'm not going to deal in hypotheticals,' Bessent told CNBC Monday about the Fed chief's future, adding, 'you know, Chair Powell's term ends in May. There's also another seat coming up in January. So we'll see.' (Fed governor Adriana Kugler's term ends on January 31, opening up the possibility for Trump to appoint a governor who could eventually be elevated to the role of Chair, if Powell were to resign or be removed.) Meanwhile, officials in the Trump administration are circling the wagons around a $2.5 billion renovation to the Fed's headquarters in Washington, DC, with the pretext of removing Powell 'for cause' due to the cost overruns and their claim that the Fed leader misled Congress when he spoke about the building's repairs in testimony delivered last month. Officials, including Russ Vought, director of the Office of Management and Budget, have accused Powell of presiding over a lavish overhaul of the central bank's headquarters to include Italian beehives, water features and executive elevators whisking Fed policymakers to an executive dining room. Powell on Friday sent a point-by-point letter to Vought noting that the buildings have not been updated in almost a century and require 'significant structural repairs,' in addition to asbestos abatement and 'complete replacement of antiquated systems.' Bessent said earlier this month that when he has his periodic breakfast meeting with the Fed chair, a longstanding tradition between the two officials, he prefers to eat at the central bank headquarters instead of at Treasury, noting 'the Fed's food is much better.'
CNBC
an hour ago
- Business
- CNBC
We need to open up the Fed and move to a different construct, says Judy Shelton
Judy Shelton, Independent Institute senior fellow and 'Good as Gold' author, joins 'Squawk Box' to discuss the Fed's inflation fight, fate of Fed Chair Powell, state of the economy, following the Taylor rule, and more.
CNBC
an hour ago
- Business
- CNBC
This crypto treasury firm is vying to be the MicroStrategy of ether–but with a focus on generating yield
The latest crypto treasury company is set to hit the public market with an ambitious plan to build the largest public vehicle for institutional exposure to ether. The Ether Machine will begin trading on the Nasdaq Monday under the ticker ETHM, once a merger with blank check company Dynamix Corporation is complete. Andrew Keys, the co-founder and chairman of the new company, has committed about $645 million in an anchor investment. The entity is backed by crypto investors 10T Holdings, Electric Capital, Pantera Capital and more. The company is the latest in an emerging cohort of new entities vying to become the MicroStrategy of Ethereum by replicating the bitcoin proxy's successful accumulation strategy, but around ether, the second largest cryptocurrency by market cap, rather than bitcoin. Keys' company plans to differentiate with a focus on yield generation through "staking" rather than simply buying and holding the ether. Staking is a mechanism for generating yield by contributing to network operations around security and transaction processing. By purchasing ether from a crypto exchange or buying shares of an ether ETF, investors would get exposure to the coin's price, "but without access to the dividend," Keys explained. "Ether produces yield if it's properly managed," he told CNBC's "Squawk Box" Monday. "The ETFs right now don't generate yield because they don't enable staking … we're able to enable staking and we're able to do other additional risk management on top of that." On Thursday, BlackRock filed with the SEC to include staking to its popular ETHA ether ETF, which just logged a record week of inflows. The ability to stake makes ether a "more productive" asset than bitcoin, according to Keys. The Bitcoin network "has one asset on it, bitcoin, that can be moved from peer to peer, but Ethereum can tokenize any asset," Keys said. It's "able to embed any type of digital asset – a bar of gold, a barrel of oil, a stock, a bond, a derivative – into digital legal agreements, and in doing so, you're able to expedite the velocity of money. You can have employment contracts that get paid by the minute, as an example." Shares of Dynamix jumped 30% in premarket trading. The Ether Machine follows Bitmine Immersion Technologies – the company newly chaired by Fundstrat's Tom Lee and more recently backed by Peter Thiel – in its ether treasury ambitions. Pantera was also a backer of Bitmine. Also this year, SharpLink Gaming, whose board is chaired by Ethereum co-founder Joe Lubin, also initiated an ETH treasury strategy; and Bit Digital recently exited bitcoin mining to focus on its ETH treasury and staking plans. Ether has taken the spotlight in crypto from bitcoin in recent months as investors anticipated the stablecoin bill known as the GENIUS Act would be signed into the first major U.S. crypto law, which President Trump did Friday. The regulatory clarity should benefit institutions and brands becoming more interested in tokenization, which includes stablecoins, most of which are issued on the Ethereum network. Ether has doubled in the last three months and last week, ether ETFs posted a record $2.18 billion in weekly inflows.
CNBC
an hour ago
- Business
- CNBC
CNBC Excerpts: SEC Chair Paul Atkins Speaks with CNBC's 'Squawk Box' Today
WHEN: Today, Monday, July 21, 2025 WHERE: CNBC's "Squawk Box" Following are excerpts from the unofficial transcript of a CNBC interview with SEC Chair Paul Atkins on CNBC's "Squawk Box" (M-F, 6AM – 9AM ET) today, Monday, July 21. Following is a link to video on All references must be sourced to CNBC. ATKINS ON DIGITAL ASSETS PAUL ATKINS: The one great thing about this is that for the first time now, the United States government has put its stamp of approval on a very key and important, potentially very important digital asset that will, I think, help to lower costs, lower risks in the market, because we can now move towards instantaneous, almost settlements of payment versus delivery for securities thanks to on chain stablecoins. And that will help, I think, innovation and to really get our markets, you know, to be the best in the world. ATKINS ON 401K PRIVATE MARKETS ATKINS: There's a big demand from investors, individual investors to be allowed into those marketplaces. There are a few ways for them to do it now, but the SEC has made it difficult in the past. So what we want to do is work with the Department of Labor and obviously at the president's direction, if, if and when an executive order comes for that. But regardless, we can work with the Department of Labor to help to have good guardrails for people to offer through various products that are registered for individual investors to put into their retirement plans for long term investment. We have to remember that these private funds are, we have issues regarding valuation, issues regarding liquidity, issues regarding fees and that sort of thing. So, we need to make it so that individual investors are relying on fiduciaries. ATKINS ON ETH TREASURIES ATKINS: Similar to Bitcoin, I mean the SEC has stated informally more than formally that Ether is not a security. And so but it's obviously the ETH blockchain is a very key component for a lot of other digital currencies. So you know it's up to companies to decide where they want to put their money and what sort of strategy they have. Obviously not for me to tell them, but I think it's encouraging that these sorts of digital assets are being embraced by the marketplace. And I think that provides a good future for development.
