Finance Minister Scott Bessent proposed a review of the Federal Reserve on Monday, which goes beyond the current controversy to build renovation work and examines its overall function.
“What we have to do is to examine the entire Federal Reserve Institution and whether they were successful,” said Bessent during an interview about CNBCS “Squawk Box”. “Did the organization succeed? If that were that [Federal Aviation Administration] And we had so many mistakes, we went back and look at why this happened. “
The comments come in the middle of an intensive conflict between the White House and the central bank. It was not clear what form an assessment would take or who would carry it out.
Last week, contradicting reports were made as to whether President Donald Trump prepared for the chairman of the Fed Fed Chairman Jerome Powell. Reports from the White House showed that there was a move, but Trump denied that he prepared what a legally questionable maneuver would be.
Besser was at the center of controversy, both as a potential successor to the Fed and as reports that refer to the finance minister as a mediator, who would like to discourage Trump from the displacement of Powell.
“President Trump asks a whole series of opinions and then makes a decision,” said Bessent when he asked for a report by Wall Street Journal that he had convinced Trump to hold Powell his hand. “So he takes many inputs, and at the end of the day it is his decision.”
Trump has demanded that the FED dramatically reduce the credit sentence overnight, which seems unlikely regardless of the chairman.
In addition, the administration has criticized the FED for cost of 2.5 billion US dollars for two of its buildings in Washington in the past few days.
According to reports, the administrative officers will soon plan to see the project personally.
In a related development, Rep. Anna Paulina Luna asked the Ministry of Justice on Saturday to examine Powell at the criminal level of what the Republican in Florida lied to against the congress. Powell misleaded the changes to the product during the congress lists in February in a way that the administrative officials claimed. CNBC made the FED for a comment.
In the question of interest rates, Bessent supported the idea that the Fed should probably moderate mainly with inflation.
“They feared to switch over tariffs, and so far we have seen very little, if at all, to see inflation,” said Bessent. “We had great numbers of inflation. So, you know, I think this idea [is] of them are unable to break out of a certain way of thinking. I don't know what to do all of these doctoral students over there. “
The Fed's short cut in December, which has completed a short loose cycle, which lowered the FED fund interest rate by a full percentage point. However, when the Fed reduces the mortgage interests and the returns of the Ministry of Finance were higher.
The market prices state that the Fed will probably be reduced again in September.
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