Bessent: It’s About Time We Took a Good Look at the Fed, Doncha Think?

OMG I know they have to hate Treasury Secretary Scott Bessent already, but holy crap. 

Is the tiny, angry, Robert Rubin economist lobby ever gonna come after him now.

🚨 BREAKING: Treasury Secretary Scott Bessent calls for a FULL INVESTIGATION into the Federal Reserve

YES! DO IT!

AUDIT THE FED! pic.twitter.com/Lat11mMmH0

— Nick Sortor (@nicksortor) July 21, 2025

‘…All these PhDs over there – I don’t know what they do. I don’t know what they do! It’s like universal basic income for, you know, academic economists…’

I hope he’s got a good pair of snake gaiters for the ankle bites he’s going to get.

Bessent, one of the easiest going, most accessible, truly fantastic Trump cabinet members (out of a superb and stellar cast of characters, I might add), has called for a look-see into exactly what’s been going on in the House of Powell.

Treasury Secretary Scott Bessent on Monday suggested a review of the Federal Reserve that would go beyond the current controversy over building renovations and look at its overall function.

“What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” Bessent said during an interview on CNBC’s “Squawk Box.” “Has the organization succeeded in its mission? 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.”

The idea itself is a breach of sacrosanct tradition – Lord almighty, one cannot question the wisdom of the Federal Reserve sages, less mind look under the hood.

It’s simply not done.

The place has more secrets than the Oracle of Delphi. 

You leave your offerings at the door and hope for the gift of good policy if the oracle is even willing to speak to you at all.

As for Bessent’s comment about universal basic income for well-placed academics, there is a certain amount of truth to that. 

Besides Jerome Powell’s blind obstinance in continuing to insist on renovating a government building to the tune of $2.5B in an economy plagued by high deficits on an uncertain world stage… 

…In recent weeks, officials including National Economic Director Kevin Hassett and Federal Housing Finance Authority chair Bill Pulte have criticized Powell over the Fed’s $2.5 billion renovation of its headquarters in Washington DC. Powell pushed back against these criticisms just days before Bessent’s Monday comments. Over the weeked, the Associated Press reported that the White House and Fed clashed over whether the renovation should incorporate more glass or the more expensive marble, with marble being the Trump administration’s choice, per meeting minutes. Adding to the turmoil, Republican lawmakers in Congress made a criminal referral against Powell earlier on Monday, alleging false statements to Congress about the renovation work. For his part, Powell has asked the central bank’s inspector general to review aspects of the project for transparency.

The Federal Reserve has 21,000 people on the payroll. What on earth do they actually do?

Well, here’s just one example: producing “research” on “systemic racism.”@SecScottBessent is right: the Fed is just Universal Basic Income for unemployable economists.

Time to DOGE the… https://t.co/r5U7Ty2LFu pic.twitter.com/wBDofrJkzG

— James Fishback (@j_fishback) July 21, 2025

It’s not only the administration taking aim at Lord Powell in his high castle. Senator Rand Paul has used Powell’s clumsy defenses of both his policies…

The Fed pays almost half a billion dollars a day in interest and a surprisingly large portion goes to foreign financial institutions – another reason to fire not just Powell but the whole Board of Governors: pic.twitter.com/UcqsjmWLql

— E.J. Antoni, Ph.D. (@RealEJAntoni) July 17, 2025

…and the renovations to reintroduce his Audit the Fed legislation, and he is getting a lot more traction than he ever has in previous crusades against the institution.

 Dr. Rand Paul (R-KY) has reintroduced the Federal Reserve Transparency Act, famously known as “Audit the Fed” legislation to require a full audit of the Federal Reserve’s operations and increase congressional oversight of its decision-making. In conjunction with the bill’s reintroduction, Senator Paul also released the latest edition of his Waste Report, which exposed the Federal Reserve’s $600 million cost overrun on renovations to its Washington, D.C. headquarters—now projected to cost taxpayers $2.5 billion in total. The report underscores the lack of transparency and accountability at the Fed, which remains exempt from a full audit by Congress or the Government Accountability Office.

“No institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve,” said Dr. Paul. “It’s long past time for Congress to stop shirking its duty and hold the Federal Reserve accountable.”

“It is Congress’ duty to hold the Fed accountable,” said Senator Marsha Blackburn (R-TN). “For too long, the Federal Reserve has operated behind closed doors while making decisions that impact the American economy. Throughout my service in Congress, I have worked to audit the Fed, and this legislation is necessary to shine a light on the Fed’s operations and provide transparency to Congress and American taxpayers.”

Powell has been his own worst enemy with his imperial impulses. While pushing back against any suggestions that his plans might be a tad excessive, his umbrage comes off looking like bruised aristocratic privilege, and his cooperation grudging.

…The renovation came to widespread public consciousness last month, when Powell, testifying in response to questions from six Republican senators, shot down reports that the project included a VIP dining room, special elevators and ornate water features. 

The Fed, in its FAQ document, clarified its use of marble in the project, and addressed the proposed “terrace garden,” which it asserted would function as a “green roof” to help with stormwater management and increase building efficiency.

Powell reiterated those points Thursday.

However, Vought, at the briefing earlier in the day, said the Fed “either misled Congress or they need to go back to the National [Capital] Planning Commission and have a reassessment of the project.”

Powell on Thursday said the Fed board “is not generally subject to the direction of NCPC with respect to its building projects,” but noted it “voluntarily collaborated” with the panel “in earlier stages of the project” and “benefited from robust and collaborative engagement.”

While Trump keeps the public pressure on Powell, the calm and collected Bessent, who is the hands-on favorite for Fed nominee when Powell exits the scene, has managed to talk the boss out of a messy firing crisis. 

…Bessent last week equated Trump’s testing the waters with regard to firing Powell as “working the refs,” akin to a coach, during a game, attempting to gain a window into a referee’s thinking. 

…In Trump’s favor is the chance for the president to nominate two Fed governors in the next 10 months. Fed Gov. Adriana Kugler’s term ends in January, and Powell’s term as chair ends in May.

Bessent, according to the Journal, reminded Trump that if he fired Powell before May, the Fed chair could sue, and the legal action could drag on until spring.

Meanwhile, if Powell were to be fired, Fed Vice Chair Philip Jefferson, a Biden nominee, would become acting chair.

It’s going to be a rocky ride for the Fed Chair, who is used to a certain degree of deference that will be sorely lacking from any Trump cabinet or administration official. The market is pricing in a rate cut in September, but Powell has disappointed the markets before. Trump has the grounds to honestly wonder if personal antipathy, rather than professional judgment, is the reason why.

And Trump has no problem letting the world know he thinks so.

If things continue to go well, it could get really noisy.

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