Tipsheet

Scott Bessent: It's Time to Rethink the Entire Federal Reserve

Matt Vespa
Matt Vespa  |  July 22, 2025 6:05 AM

Does Treasury Secretary Scott Bessent want to go to war with the Federal Reserve? He’s not happy with how they’re operating. Much like his boss, President Donald Trump, who wants Fed chair Jerome Powell to lower the rates, Bessent took a hatchet to the institution and the economic establishment, adding they don’t know how to behave or analyze a high-functioning executive president. He also said they’re out of their depth, “not as economically sophisticated as President Trump.” 

During an interview with CNBC yesterday, Bessent said that he essentially wants to audit the Fed, wanting to see what it does well and where it falls short. He also cut into the Panicans who warned about inflation spiking under Trump and economic disaster due to the tariff policy—none of which has happened (via RCP):

What we need to do is examine the entire Federal Reserve institution and whether they have been successful.

[…] 

The Fed, as well, deals with monetary policy, regulations, financial stability. And again, I think that we should think: has the organization succeeded in its mission? You know, if this were the FAA and we were having this many mistakes, we would go back and look at, "Why has this happened?" 

I mean, look at the—as you said at the top of this broadcast—there was fear-mongering over tariffs. And thus far, we have seen very little, if any, inflation. We've had great inflation numbers. 

So, you know, 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. I don’t know what they do. 

This is like universal basic income for academic economists. 

Why not review the entire institution? Perhaps we can begin if we remove Powell. 

Full interview: