Treasury Secretary Scott Bessent Demands Sweeping Review of Entire Federal Reserve

by Jim Hᴏft Jul. 21, 2025 8:00 pm

Treasury Secretary Scott Bessent called out the Federal Reserve on Monday, blasting Chair Jerome Powell’s stewardship and demanding an institution-wide review of the central bank’s performance, bloated bureaucracy, and disturbing deviation from its core mission.

“What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” Bessent said during CNBC interview. “If this were the [Federal Aviation Administration] and we were having this many mistakes, we would go back and look at why has this happened.”

• Secret Meeting on Jekyll Island (1910): In November 1910, a secret meeting of prominent bankers and government officials was convened on Jekyll Island, Georgia, by Senator Nelson Aldrich. The purpose of this meeting was to discuss and draft a proposal for reforming the nation’s banking system, which had been plagued by financial panics like the Panic of 1907. The group operated under strict secrecy to avoid public scrutiny and press attention, according to Jekyll Island, Georgia.
• The Aldrich Plan: The outcome of this meeting was a plan that proposed a National Reserve Association, a precursor to the Federal Reserve System. This plan, although not enacted as initially proposed, laid the foundation for the eventual Federal Reserve Act.
• The Federal Reserve Act of 1913: The concepts developed on Jekyll Island were later incorporated into the Federal Reserve Act, signed into law by President Woodrow Wilson on December 23, 1913. This act created the Federal Reserve System as the central bank of the United States, aiming to provide a more stable and flexible monetary and financial system.
• Debate and Controversy: The Federal Reserve’s origins and structure have been the subject of ongoing debate and controversy. Concerns about the secrecy surrounding the Jekyll Island meeting and the influence of powerful financial interests have contributed to conspiracy theories about the Federal Reserve’s formation. Some critics argue that the system is not fully accountable or transparent and that the regional Federal Reserve Banks are too closely tied to the private sector. Others contend that the Federal Reserve operates outside the constitutional authority granted to Congress, according to Investopedia. However, proponents emphasize the need for a central bank to prevent financial crises and promote economic stability, according to Investopedia. 

In essence, while the Federal Reserve was legally established through the Federal Reserve Act of 1913, the secretive nature of the Jekyll Island meeting and the perceived influence of powerful financial interests have fueled the ongoing debate and scrutiny surrounding its legitimacy and formation. 

Bessent specifically torched the Fed for its elitist groupthink and catastrophic predictions on tariffs and inflation.

“They were fear-mongering over tariffs, and thus far we have seen very little, if any, inflation. We’ve had great inflation numbers. So, you know, I think this idea [is] of them not being able to break out of a certain mindset. All these Ph.D.s over there, I don’t know what they do.”

Later, Bessent took to X to double down, releasing a scathing statement demanding a full-scale institutional audit — not just of monetary policy, but of the Fed’s ever-growing empire of unchecked influence and wasteful expenditures.

“Today in a CNBC interview, I called for a review of the Federal Reserve. It is my belief that the central bank should conduct an exhaustive internal review of its non-monetary policy operations. Significant mission creep and institutional growth have taken the Fed into areas that potentially jeopardize the independence of its core monetary policy mission.

As I have said many times, the Fed’s conduct of monetary policy “is a jewel box” that should be walled off to preserve its independence. This independence is a cornerstone of continued U.S. economic growth and stability.

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However, this autonomy is threatened by persistent mandate creep into areas beyond its core mission, provoking justifiable criticism that unnecessarily casts a cloud over the Fed’s valuable independence on monetary policy.

While I have no knowledge or opinion on the legal basis for the massive building renovations being undertaken on Constitution Avenue, a review of the decision to undertake such a project by an institution reporting operating losses of more than $100 billion per year should be conducted.

The Fed does regular reviews of its monetary policy framework. I would urge Fed leadership to similarly undertake, publish and implement a comprehensive institutional review across its entire mission to buttress its credibility. It will go a long way towards strengthening the Fed’s credibility with the American people on its core mission of guiding our nation’s monetary policy.”owards strengthening the Fed’s credibility with the American people on its core mission of guiding our nation’s monetary policy.”