Fed Independence Under Siege: Mandate Creep Sparks Controversy
U.S. Treasury Secretary Scott Bessent has highlighted a threat to the Federal Reserve's independence due to its extension into non-core areas. He called for a review of the Fed's operations, including its costly renovation project. Meanwhile, President Trump has criticized Fed Chair Jerome Powell over interest rates and expenditure issues.
The independence of the Federal Reserve is under scrutiny as U.S. Treasury Secretary Scott Bessent warns of its 'mandate creep' into areas beyond monetary policy. This extension raises concerns over its autonomy, prompting calls for a rigorous assessment of its operations.
Bessent expressed particular focus on the Fed's decision to undertake an expensive renovation of its headquarters amidst financial losses. His remarks come as President Donald Trump continues his critique of Fed Chair Jerome Powell's handling of interest rates and questions the legitimacy of the costly renovation project.
Despite pressure from the administration, the Fed maintains Powell's position is safeguarded by recent legal interpretations, ensuring he can only be removed for cause. The situation underscores the ongoing tension between the administration and the central bank over fiscal policy strategies and financial oversight.
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