Bessent Calls for Accountability and Greater Oversight at the Federal Reserve

The Trump administration’s campaign to root out waste, fraud, and abuse has now turned its focus toward the Federal Reserve, with Treasury Secretary Scott Bessent raising concerns about possible ethics violations involving several members of the central bank’s leadership.

Bessent argued that the Federal Reserve is currently losing roughly $100 billion a year without sufficient accountability. He linked these losses to policy failures that coincided with the highest inflation Americans have experienced in nearly half a century. According to him, ongoing reviews could reveal that multiple regional presidents or governors violated ethical standards during this period, and he stressed that such findings should not go unanswered.

While acknowledging the Federal Reserve’s long-standing independence, Bessent questioned whether that independence has effectively shielded it from meaningful oversight. He contrasted the Fed’s structure with that of the elected presidency, which operates under clear constitutional checks and balances. In his view, unelected officials at the central bank wield extraordinary power over money creation, interest rates, and monetary policy without being held to comparable standards of responsibility.

Bessent described the Federal Reserve as occupying a uniquely insulated position within the federal system, one that lacks adequate supervision. He suggested that several questionable issues arose during Jerome Powell’s tenure as chair and said those matters deserve closer scrutiny.

He later reiterated that independence should not be confused with immunity from oversight. While reaffirming support for the principle of an independent central bank, Bessent emphasized that transparency and accountability are still essential, especially when public trust and vast sums of money are involved.

Addressing comparisons between federal renovation projects, Bessent rejected attempts to equate construction costs at the White House with overruns tied to Federal Reserve building renovations. He pointed out that White House projects are funded privately, whereas the Federal Reserve operates with what he described as “magic money,” since it can effectively create its own funds.

Bessent explained that even routine purchases within the Treasury Department require formal appropriations, highlighting the contrast with the Fed’s financial autonomy. He argued that this lack of oversight makes greater transparency not only reasonable but necessary.

Finally, Bessent revealed that he has been calling since last summer for the Federal Reserve to conduct its own internal investigation, a request he says has been ignored. He expressed concern that inquiries from the Justice Department reportedly went unanswered, adding that any public official receiving such inquiries should respond promptly and fully.