The Secretary of the Treasury, Scott Becent, stated that the United States federal reserve system was out of control and that a comprehensive internal audit was required to curb its expanding operations. This statement was made on Monday in the CNBC interview and on Tuesday in the presence of the Fox Business Channel.
“What we need to do is to review the entire Federal Reserve and whether they have succeeded,” Becent explained on Monday. The Minister of Finance elaborated on his previous information in another interview on Tuesday. “Everything else the Fed has done over the years is growing, and this happens when there is no oversight”, he said.
Central to all this is the Federal Reserve Chairman, Jerome Powell, who was accused by several members of the Trump administration of perjury, financial mismanagement and incompetence, including the President himself.
Since the last cut in December 2024, Powell has chosen to keep the central bank ' s target interest rate between 4.25 and 4.50 per cent. His reluctance to lower interest rates had provoked US President Donald Trump, who hoped to reduce the country’s $360 trillion national debt forecast of $1 trillion in interest payments by lowering interest rates.
“The US economy is booming and inflation is very low, and we should reduce interest rates to 1 per cent and save $1 trillion a year in interest costs.” Trump wrote on Friday. "I can't tell you how stupid it is to be too late -- too bad for our country!" The nickname "too late" was given to Powell by the President, which means that Powell wouldn't want to lower the interest rate.
But in addition to his interest rate position, Powell was severely criticized for spending $2.5 billion on the refurbishment of the Fed ' s headquarters in Washington, D.C., including $700 million in budget overruns. The controversial renovation resulted in allegations of financial misconduct. When Powell defended the project during his testimony in Congress, he was accused by Congressman Anna Luna of Florida of perjury and of lying about key details of the renovation.
Senator Cynthia Loomis of Wyoming has also criticized the Fed’s Chairman for deliberately depriving encryption companies of their rights by abusing the Fed’s influence on American banking. Loomis accused the Federal Reserve of categorizing encrypted currency as a bank reputation risk in a “government cross-sectoral operation called Operation Strangulation 2.0” during the Biden administration.
All these developments seem to have led Becent to conclude that Powell may have good intentions, but that the expansion of the Fed ' s responsibilities may be beyond Powell ' s ability to manage the Central Bank.
“I know Chairman Powell. There is no indication that he should resign now. He's always been a good public servicer, "Bircent explained. “I call for an internal review... I have confidence in President Powell that, if he does so, we can rationalize the non-monetary functions of the Fed.”