Treasury Secretary Scott Bessent is taking aim at both the Federal Reserve and the rules the Fed enforces as a supervisor of big banks but making it clear he doesn’t think Fed chair Jerome Powell needs to step down immediately.
His boss President Trump has been calling repeatedly for Powell’s resignation.
“There’s nothing that tells me that he should step down right now,” Bessent said on Fox Business Tuesday. “His term ends in May. If he wants to see that through, I think he should. If he wants to leave early, I think he should.”
Yet the Treasury secretary still turned up the pressure on Powell and the Fed with a post Monday on X stating that there should be a review of the central bank’s $2.5 billion renovation of its headquarters and a review of its non-monetary policy operations.
He argued that “significant mission creep and institutional growth have taken the Fed into areas that potentially jeopardize the independence of its core monetary policy mission.”
He posted the comments on the same day he spoke at the opening of a Fed conference designed to review the capital framework governing big banks. That conference continues Tuesday with opening remarks from Powell.
At the conference Bessent he made a separate call for “deeper reforms” of the regulations governing the nation’s biggest banks, arguing that “outdated capital requirements” impose “unnecessary burdens on financial institutions.”
Specifically he suggested that regulators scrap a dual capital structure proposed during the last administration but never enacted, calling it “flawed.”
“We need deeper reforms rooted in a long-term blueprint for innovation, financial stability, and resilient growth,” Bessent said in his remarks.
Bessent is among the candidates being considered to replace Powell as chair of the central bank once Powell’s term expires in 10 months.
Trump and other White House officials have been hammering Powell and the Fed over the slow pace of interest rate cuts, with none being made so far in 2025, as well as the costs involved in the Fed’s $2.5 billion renovation of its headquarters complex along the National Mall in Washington.
Bessent joined that chorus on Monday.
“While I have no knowledge or opinion on the legal basis for the massive building renovations being undertaken on Constitution Avenue, a review of the decision to undertake such a project by an institution reporting operating losses of more than $100 billion per year should be conducted,” Bessent said in his Monday post on X.
Trump has considered firing Powell and Bessent has urged the president not to do so, according to The Wall Street Journal. Powell has said repeatedly that he intends to serve out his term as chair and that his removal is not permitted by law.
