Bessent says Powell doesn't need to resign but should conduct internal review
A day after calling on CNBC for an examination of the Fed's "entire" operation, Bessent said that doesn't mean the central bank leader should step down. President Donald Trump, conversely, has said he hopes Powell quits and has pondered removing him.
"I know Chair Powell. There's nothing that tells me that he should step down right now. He's been a good public servant," Bessent said on Fox Business. "His term ends in May. If he wants to see that through, I think he should. If he wants to leave early, I think he should."
There have been no indications from Powell that he plans to step down despite a barrage of criticism from the Trump administration.
Most recently, White House officials have zeroed in on the Fed's $2.5 billion building renovation project that has included significant cost overruns.
Bessent said his desire for a review of Fed operations should come internally, with monetary policy and the setting of interest rates "off to the side" and in a "jewel box" away from political influence.
"Everything else that the Fed has done over the years has just grown and grown and grown, and this is what happens when you don't have oversight," he said.
For Powell, leading an internal review would be "a real chance here for him, for his legacy, to be that he right-sized the non-monetary policy functions of the Fed," Bessent added.
Trump has demanded that the Fed lower interest rates dramatically, though the rate-setting Federal Open Market Committee at its policy meeting next week is again expected to stay on hold. Powell and most of his colleagues have indicated they want to wait to see the impact that Trump's tariffs are having on inflation before taking any further steps.
In a CNBC interview Tuesday, Fed Governor Michelle Bowman, who has hinted she would favor at cut at this month's meeting, supported the notion of Fed independence but also stressed the need for accountability.
"It's very important, and I've said this a number of times in the past, that we maintain our independence with respect to monetary policy," she said during a "Squawk Box" interview. "But we also, as a part of that independence, have an obligation for transparency and accountability as well."
Markets overwhelmingly expect the Fed keep its short-term borrowing rate locked in a range between 4.25%-4.5%, but are leaning toward the likelihood of a cut in September, according to CME Group futures data.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
San Francisco Chronicle
9 minutes ago
- San Francisco Chronicle
Like the Fed, European Central Bank holds off on rate cuts amid tariff upheaval
FRANKFURT, Germany (AP) — The European Central Bank left interest rates unchanged Thursday, hitting pause on rate cuts amid uncertainty over US President Donald Trump's tariff onslaught and high-stakes trade talks marked by threats of drastically higher import taxes on European goods. Bank President Christine Lagarde said the current economic environment and the potential impact of higher tariffs was 'exceptionally uncertain." Higher tariffs could slow investment, growth and inflation - or they could be inflationary by disrupting existing supply chains for parts and raw materials. 'The sooner this trade uncertainty is resolved ... the less uncertainty we will have to deal with," she said. 'And that would be welcome by any economic actors, including trade tensions are resolved in short order, it will clear some of the uncertainty that we have weighing on the decision-making of consumers, of investors, of, untold enterprises." 'You could argue that we are on hold, we are in this wait and watch situation.' The central bank for the 20 countries that use the euro is facing the same dilemma that has led the U.S. Federal Reserve to hold off on cutting rates further: it's hard to tell how high the tariffs will end up after fraught negotiations, and what the ultimate impact will be on the economy. Fed Chair Jerome Powell has been harshly criticized by the Trump for delaying rate cuts. For his part, Powell has said the Fed wants to see the impact of the duties on prices and the economy before making any rate changes. The ECB has already cut rates eight times since June of last year. The monetary authority for the 20 countries that use the euro currency has been lowering rates to support growth after raising them in 2022-2023 to snuff out inflation caused by Russia's invasion of Ukraine and the rebound after the pandemic. With the bench mark rate now at 2%, down from a record high of 4% Analysts say a rate cut in September is a possibility but not a certainty. The reason: ECB's policymakers simply don't know the outcome of talks between the EU's executive commission and the Trump administration. Trump first set a 20% tariff for EU goods, then threatened 50% after expressing displeasure at the pace of talks, then sent the EU a letter informing officials of a potential 30% tariff. EU officials earlier held out hope of winning at least the 10% baseline that applies to almost all trade partners, and analysts think that the actual rate may be lower than Trump's tariff threats. The talks are up against an Aug. 1 deadline, but earlier deadlines have slipped as the sides kept talking. Higher tariffs, or import taxes, on European goods would mean sellers would have to either increase prices for U.S. consumers - risking loss of market share - or swallow the added cost in terms of lower profits. In either case, higher tariffs would hurt export earnings for European firms and slow the economy, which would strengthen the case for another rate cut in September. The ECB's rate cuts have helped support economic activity by lowering the cost of credit for consumers and businesses to purchase goods. Higher rates have the opposite effect and are used to cool of inflation by reducing demand for goods. Growth in the eurozone was relatively strong at 0.6% in the first quarter - though that was partly due to rushed shipments of goods trying to beat the tariffs. Inflation has fallen from double digits in late 2022 to 2% in June, in line with the ECB's target. A stronger euro, which lowers the price of imports, and softer global prices for oil have helped keep inflation moderate.
Gizmodo
9 minutes ago
- Gizmodo
Jeff Bezos Reportedly Eyes Purchase of CNBC as Tech Billionaires Gobble Up Media
Jeff Bezos is thinking about buying the financial news network CNBC, according to a new report from the New York Post, which cites anonymous sources. Given the damage Bezos has already done to the Washington Post, anyone who values the information they get from CNBC should probably be worried. An unnamed source told the New York Post that Bezos buying CNBC would 'align well with his interests,' and it would remain a 'neutral voice.' CNBC is being offloaded by its parent company, Comcast, into a new publicly traded company called Versant by the end of 2025. The company's other cable TV networks, which include MSNBC, SYFY, the Golf Channel, USA Network, and E!, will also join Versant. The Daily Beast reported Wednesday that a source 'close to Bezos' told the news outlet that he's 'not considering a bid to buy CNBC,' but the man himself has not commented on the possibility yet. The Daily Beast denial is also just one line with no further explanation. Sources might insist to the New York Post that Bezos only wants CNBC as a 'neutral voice' in his media portfolio, but anyone who thinks Bezos is above tinkering with the editorial content of his media properties hasn't been paying attention. The 61-year-old Amazon founder purchased the Washington Post in 2013 for $250 million and, by all public accounts, didn't mess with the day-to-day direction of the newspaper. But that all changed shortly before the 2024 presidential election, when the Washington Post editorial board planned to endorse then-Vice President Kamala Harris, the Democratic candidate who was running against current President Donald Trump. Bezos not only spiked the endorsement of Harris but set about purging the writing staff of liberal voices on the opinion pages. Recently, writers like liberal columnist Jonathan Capehart, TikTok guy Dave Jorgenson, and polling expert Philip Bump have left the paper, taking buyouts offered to people who don't want to be involved in the new era of Bezos meddling. Those kinds of changes are any newspaper owner's right, but the shift has set off a wave of anger and outrage among people who see Trump's presidency as a threat to the future of the United States as a liberal democracy. According to NPR, Bezos lost the newspaper about 250,000 subscribers in the span of a week after news broke about the Harris endorsement, and he reportedly lost 75,000 more as the billionaire announced that anyone who didn't adhere to his particular ideology of 'free markets and personal liberties' should leave the storied media institution. Bezos also cozied up to Trump, attending the president's inauguration in January and more recently meeting with the president at the White House last week, according to CNBC. The dude is apparently all-in on the MAGA agenda of competitive oligarchy. Rumors recently circulated that Bezos may be interested in buying Condé Nast, the media company that owns magazines like Vogue and Wired. There was speculation that Bezos might even just carve out Vogue for his new bride, Lauren Sanchez, whom he married last month in Venice, Italy, a wedding that was met by protesters who didn't appreciate his proximity to Trump. At this point, it's rumors and speculation. But sometimes rumors turn into reality. And if Bezos buys CNBC, there's a good chance it could become the latest political instrument of a man worth over $200 billion.
Business Insider
10 minutes ago
- Business Insider
Feeling generous? You can Venmo the US government to help pay down the debt
Helping the federal government pay down the country's soaring national debt is now as easy as reimbursing your friend for a round of drinks. Earlier this year, the US Treasury Department began accepting Venmo payments on where individuals can go online to contribute gifts to reduce the public debt. The department had already accepted payments via credit card, debit card, and bank account, and it has accepted charitable contributions for decades. According to Treasury data, the government has brought in roughly $120,000 a month in charitable contributions to pay down the debt since 2020. The Treasury received more than $2.7 million in gifts in 2024, and roughly $1 million in 2023. In the first five months of this year, the department brought in about $434,500. Reached by Business Insider, a spokesperson for the Treasury Department's Bureau of Fiscal Service did not immediately provide comment on the change. According to the Wayback Machine, Venmo was added as a payment method between February 22 and March 8 of this year. NPR reporter Jack Corbett first identified the change on Wednesday. The United States government is more than $36 trillion in debt, a number that's only expected to grow in the coming years. President Donald Trump's"Big Beautiful Bill," recently approved by Congress, is projected to add an additional $3.4 trillion to the debt over the next 10 years, according to the Congressional Budget Office.
