Treasury Secretary Scott Bessent assured that President Donald Trump remains committed to the independence of the Federal Reserve, while defending the need for accountability by the central bank.
Independence Does Not Mean ‘No Oversight’
“Of course he’s committed to the independence of the Federal Reserve,” Bessent said, while appearing on NBC News’ “Meet The Press” on Monday, while adding that “independence does not mean no oversight.”
Bessent defended the Justice Department’s ongoing investigation into alleged budget overruns tied to the central bank’s Washington, D.C, headquarters renovation, saying, “the Federal Reserve has magic money, they print their own money,” which requires stronger oversight.
He also said that he has been asking the central bank to “do its own internal investigation” since last summer, which he said was ignored, while also calling out the institution for ignoring the DOJ’s inquiries. “If I were to receive inquiries from the Justice Department, I would answer them,” he said.
When asked about the recent Axios story suggesting that Bessent privately expressed concerns to Trump regarding the probe’s impact on the markets, he said market reactions proved otherwise, noting that the “stock market went up” and “bond yields went down.”
He concluded that “the markets are the ultimate arbiter of whether the Fed’s independence is being impugned,” while reiterating that “bringing in some sunlight does not mean coercion.”
Top Economists Back Fed Chair Jerome Powell
Leading economists have backed Fed Chair Jerome Powell amid the DOJ investigation, including former Fed Chairs Ben Bernanke, Alan Greenspan and Janet Yellen, who said the probe was “extremely chilling” for the independence of the central bank.
Even global central bank leaders have voiced their support for Bessent, with European Central Bank President Christine Lagarde saying, “We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell,” speaking on behalf of the bloc’s twelve central banks.
Economist Justin Wolfers has slammed the administration’s move as “unprecedented,” saying that such actions are expected of “tin-pot dictators,” while calling it “the sort of story that never ends well.”
Photo Courtesy: Maxim Elramsisy On Shutterstock.com
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