US treasury secretary scott Bessent said on Tuesday he saw no immediate reason for federal reserve chair Jerome Powell to step down. This comes just a day after Bessent publicly called for a full review of the Fed’s operations beyond its main role in setting interest rates. Speaking to Fox Business, Bessent said, “There’s nothing that tells me that he should step down right now.” He also noted that Powell’s term ends in May 2026 and that he should be allowed to complete it—unless he chooses to leave early. The comment follows rising pressure from US president Donald Trump’s administration for the Fed to cut interest rates. Trump has been sharply critical of Powell in recent weeks, especially over the central bank’s $2.5 billion renovation of its headquarters. While Trump said Powell has done a “bad job,” he also said it’s unlikely he’ll remove him before his term ends.
Late Monday, Bessent posted on X calling for an “exhaustive internal review” of the Fed’s non-monetary operations. He said the bank’s independence was vital for economic stability but warned it was being threatened by “mandate creep,”—saying the Fed was taking on tasks outside its core responsibilities. He did not give examples. Earlier on CNBC, Bessent said the entire Federal Reserve should be evaluated for effectiveness. Meanwhile, Fed vice chair Michelle Bowman defended the bank’s independence and said it’s “very important” for setting monetary policy. The Fed has held interest rates steady this year while assessing the impact of Trump’s new tariffs. Trump argues that rates should be three percentage points lower, saying it would ease debt costs. But Fed officials are cautious, warning that cutting rates too soon could raise consumer prices.The Fed holds its next policy meeting at month-end, and is widely expected to keep rates unchanged again.
