Treasury Secretary Scott Bessent on Friday called for a sweeping, independent review of the Federal Reserve and urged the central bank to "change course," escalating the Trump administration’s push to reshape the institution that sets U.S. monetary policy.
In an opinion piece in the Wall Street Journal and a longer critique published in The International Economy, Bessent said the review should cover the Fed’s role in monetary policy, regulation, communications, staffing and research. He also urged that bank supervision be transferred to other government authorities and that the Fed curtail bond purchases made outside of what he described as true crisis conditions.
"There must also be an honest, independent, nonpartisan review of the entire institution," Bessent wrote. He accused recent Fed policies of contributing to inflation, widening inequality and worsening the housing affordability crisis, and said the institution had "caused distortions" in the economy through measures such as large bond purchases.
The remarks represent a forceful assertion of executive branch scrutiny of the Fed at a time when the central bank's independence is widely viewed as a cornerstone of credible inflation control. Bessent framed the review as nonpartisan and independent, but his comments follow broader administration efforts to exert influence over monetary and financial regulatory policy.
Bessent’s call touches on several longstanding debates over the Fed’s remit. Since the 2008 financial crisis, the central bank has used tools such as large-scale asset purchases and an expanded supervisory role to stabilize markets and oversee banking-sector risks. Supporters say those powers are essential to manage downturns and preserve financial stability; critics argue they can create market distortions and raise distributional concerns.
The secretary’s proposal to shift bank supervision away from the Fed would mark a substantial institutional change. Responsibility for supervising and regulating banks in the United States is currently shared among the Fed and several other federal and state agencies. Moving oversight functions would require legislative action and a reworking of long-standing regulatory arrangements.
Bessent also targeted the Fed’s communications and staffing, areas where the central bank has sought to balance transparency with independence. Questions about the Fed’s public messaging and research priorities have become focal points in debates over how the institution evaluates inflation dynamics and financial stability risks.
The administration’s call for a formal review could prompt responses from lawmakers, financial markets and the Fed itself. Any significant alteration to the Fed’s statutory authorities or practices would likely involve Congressional deliberation and could reshape how monetary and supervisory policies are coordinated.
Bessent’s critique did not lay out a legislative timetable, and his pieces stopped short of specifying the precise institutional framework that should replace current arrangements. He framed the review as a comprehensive, nonpartisan assessment aimed at aligning the Fed’s actions with broader economic goals.
The call highlights intensifying scrutiny of the central bank at a pivotal moment for U.S. economic policy. Any movement toward restructuring the Fed’s authorities would touch fundamental questions about the balance between independence and accountability in U.S. monetary and financial regulation.