Scott Bessent said the central bank was wrong to criticize President Donald Trump’s tariff policy
US Treasury Secretary Scott Bessent has called for a review of the Federal Reserve, questioning whether the central bank has fulfilled its mission in light of the “many mistakes” he claims it has made.
While Bessent did not specify which errors he had in mind, he pointed to the Fed’s opposition to President Donald Trump’s tariff policies, which Fed Chair Jerome Powell previously warned could push inflation and unemployment higher.
“What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” Bessent told CNBC on Monday. “If this were the [Federal Aviation Administration] and we were having this many mistakes, we would go back and look at why this happened.” He did not clarify what form such a review would take or who would lead it.
“There was fear-mongering [by the Fed] over tariffs and thus far we’ve seen very little if any inflation,” he continued. “All those PhDs over there, I don’t know what they do.”
Treasury Secretary Scott Bessent is zeroing in on the Fed:
“What we need to do is examine the entire Federal Reserve and whether they have been successful. All of these Ph.D.s over there, I don’t know what they do.”
Bessent defended Trump’s tariff policy, calling him a “high-functioning executive” with an “economically sophisticated” approach, and argued that higher tariffs pressure other countries into better trade deals with the US.
In April, Trump imposed a 10% tariff on most trade partners, with steeper rates for China, Mexico, Canada, and the EU. More targeted duties followed, with additional measures reportedly planned. He framed the tariffs as a strategy to secure better trade terms, boost manufacturing, protect jobs, cut the deficit, and fund tax relief. While some US trade partners pushed back and certain duties were paused, most have entered talks for tariff relief and new agreements.
Trump has repeatedly argued that tariffs aren’t driving inflation and criticized the Fed and Chair Powell for refusing to cut interest rates, which he claims is raising debt-servicing costs. In June, consumer prices rose 0.3% month-on-month, putting annual inflation at 2.7%, in line with forecasts. Trump used the figures to renew calls for monetary easing.
“Consumer Prices LOW. Bring down the Fed Rate, NOW!!!” he posted on Truth Social last week. Trump previously said the president should have more control over interest-rate decisions, and has repeatedly called for Powell to resign.
