by Ann Saphir and David Lawder
(Reuters) -The American Treasury Secretary, Scott Bessent, called on Friday to a full review of the Federal Reserve (Fed), including its power to set interest rates, while the Trump administration intensifies its efforts to exercise control over the central bank.
“There must (…) be an honest, independent and non -support examination of the entire institution, including monetary policy, regulations, communications, staff and research,” wrote Scott Bessent in the Wall Street Journal.
The US Treasury Secretary also called on the Fed to leave the banks supervision to other government authorities and to “reduce the distortions it causes in the economy”, including by purchases of bonds outside real periods of crisis.
“The Fed must change course,” he said in a longer article published in The International Economy, castigating the Central Bank policy which, according to him, contributes to feeding inflation, promotes rich at the expense of the poor and aggravates the difficulties of access to housing.
Scott Bessent also accused the Fed of being a supporter and of misuse of public funds, whether to renovate its seat or for its control power, amplifying accusations made within and outside the Trump administration.
The criticisms of Scott Bessent, which he described as attempted to restore the independence of the Fed, intervene when he started a series of interviews on Friday – according to a source to the process – in order to find a successor to the president of the Central Bank, Jerome Powell, whose mandate will come to an end in May.
President Donald Trump regularly criticizes Jerome Powell since he appointed him president of the Fed, in 2018. He accentuated his pressure on the central bank since the start of the year so that she lowered his rates and he tried to set up allies within the institution.
The Fed seems ready to launch a series of rate drops this month to support an increasingly fragile labor market, although no current political leader has demonstrated his support for the drastic decreases claimed by Donald Trump or the complete overhaul of the Fed recommended by Scott Bessent.
(Ann Sapphir report, Benjamin Mallet)
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