Treasury Secretary Scott Bessent on Friday called for a review of the Federal Reserve, arguing that it has strayed from its original core missions by taking on banking regulation.
The Federal Reserve was created as the United States’ central banking system in 1913, after a series of financial panics prompted government intervention. It consists of a panel of governors and 12 reserve banks located in major cities.
Bessent argued in an opinion piece for the Wall Street Journal that the core missions of the banking system are promoting full employment, stable prices and moderate long-term interest rates and that it has been distracted from these missions.
“The Fed now regulates, lends to and sets the profitability calculus for the banks it oversees, an unavoidable conflict that blurs accountability and jeopardizes independence,” he wrote. “Looking ahead, the Fed must scale back the distortions it causes in the economy. Unconventional policies such as quantitative easing should be used only in true emergencies, in coordination with the rest of the federal government.
“There must also be an honest, independent, nonpartisan review of the entire institution, including monetary policy, regulation, communications, staffing and research,” he added.
The secretary also accused the Fed of misusing public funds and engaging in partisan politics.
The op-ed comes after the Fed faced backlash for not lowering interest rates despite stable inflation and strong jobs numbers.
It is not clear who Bessent is hoping will conduct the review, or when the review would be done. Bessent previously urged Federal Reserve Chairman Jerome Powell to conduct an internal “basis” before an external review is done, per CNN.
Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.Â
