Treasury Secretary Bessent Warns Fed's Independence at Risk Over Mandate Creep

U.S. Treasury Secretary Scott Bessent warned that the Federal Reserve’s independence on monetary policy is under threat due to what he called “mandate creep” into non-policy areas. Posting on X, Bessent said this drift from the Fed's core mission has drawn valid criticism and risks undermining its autonomy, which he described as essential to U.S. economic stability and growth.

Bessent urged a comprehensive review of the Fed’s operations beyond its monetary policy role, singling out the $2.5 billion renovation of the Fed’s century-old Washington headquarters. The project, approved during Trump’s first term, has exceeded its budget and drawn scrutiny from President Trump, who suggested possible fraud and used it as another reason to call for the removal of Fed Chair Jerome Powell.

Bessent referred to the Fed’s monetary policy as a “jewel box” that must be protected. He refrained from offering legal judgment on the renovation project but criticized the Fed’s performance, questioning the value of its highly educated staff. He compared the situation to the FAA, suggesting that if such mistakes occurred in aviation, a full investigation would be launched.

When asked by CNBC whether he advised Trump not to fire Powell, Bessent declined to comment, stating it was up to the president. Powell, whose term as chair ends in May 2026, defended the renovation as necessary for safety upgrades and hazardous material removal.

A recent Supreme Court ruling reaffirmed that the Fed chair cannot be removed over policy disagreements but only “for cause.” Bessent, seen as a potential successor to Powell, noted another seat on the Fed’s Board of Governors will open in January.