Bessent: "There Must Be an Entire Review of the Federal Reserve"

[Webster]

(The Guardian) Treasury secretary Bessent calls for 'entire' review of Fed
Treasury secretary Scott Bessent earlier called for renewed scrutiny of the Federal Reserve, including its power to set interest rates, as the Trump administration continues its efforts to exert control over the US central bank, whose insulation from short-term political pressures is widely seen as key to its effectiveness.

“There must also be an honest, independent, nonpartisan review of the entire institution, including monetary policy, regulation, communications, staffing and research,” Bessent wrote in the Wall Street Journal.

He called for the Fed to leave bank supervision to other governmental authorities and to “scale back the distortions it causes in the economy”, including by bond purchases made outside of true crisis conditions.

 

[gwolf666]

Bessent's proposal reflects a very sensitive discussion about the Federal Reserve's independence. A thorough review of its functions may make sense, but there are also risks if its ability to act without political pressure is weakened. Banking supervision and monetary policy have always been intertwined, so separating these roles is not so simple. In the end, the important thing is to find a balance that maintains economic stability and confidence in the institution.