As Trump attacks Powell, US Treasury's Bessent warns Fed independence at risk from ‘mandate creep'
The Fed's 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,' Bessent said in a post on X.
He called Fed monetary policy 'a jewel box' that should be walled off to preserve its independence, which he called a cornerstone of continued US economic growth and stability.
Bessent said a review should be conducted into the Fed's decision to launch a massive renovation project of its headquarters at a time when it is posting operating losses. He did not say who should conduct that review, adding that he has 'no knowledge or opinion on the legal basis' for the project.
President Donald Trump has railed repeatedly against Fed Chair Jerome Powell and urged him to resign because of the central bank's reluctance to cut interest rates.
In recent days Trump has also taken aim at the US$2.5 billion renovation at the Fed's almost 100-year-old Washington headquarters, which has exceeded its budget, suggesting there could be fraud involved and that might be a reason to oust Powell.
A recent Supreme Court opinion has solidified a long-standing interpretation of the law that the Fed chair cannot be fired over policy differences but only 'for cause.'
The Fed's Board of Governors approved the renovation project in 2017, during Trump's first term, and received design approval from the National Capital Planning Commission in 2020 and 2021.
Speaking with CNBC earlier on Monday, Bessent declined to comment on a report that he had advised Trump not to fire Powell, saying it would be the president's decision.
'If this were the (Federal Aviation Administration) and we were having this many mistakes, we would go back and look at why. Why has this happened?' said Bessent, whom Trump has mentioned as a possible candidate to replace Powell. 'All these PhDs over there, I don't know what they do.'
Powell last week responded to a Trump administration official's demands for information about cost overruns on the renovation project, saying it was large in scope and involved a number of safety upgrades and hazardous materials removals.
Bessent declined to be drawn on predictions that US financial markets could crash if Powell was ousted. Powell's term as chair ends in May 2026, although he is due to stay on as a Fed governor through January 2028. Bessent noted another governor seat will come open in January. — Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
2 hours ago
- The Sun
Trump urges Europe to act on immigration during Scotland visit
ABERDEEN: US President Donald Trump delivered a sharp message to Europe on immigration as he arrived in Scotland for a four-day visit to his golf courses. Landing late Friday, he warned that unchecked migration is 'killing Europe' and urged leaders to act swiftly. 'On immigration, you better get your act together,' Trump told reporters. 'You're not going to have Europe anymore if you don't. Last month, we had nobody entering our country—nobody. You've got to stop this horrible invasion.' The president, who is set to meet British Prime Minister Keir Starmer and Scottish First Minister John Swinney, praised Starmer as a 'good man' for securing a long-awaited trade deal. 'He got it done in 12 years—that's a good deal for the UK,' Trump said. Trade discussions are high on the agenda, with Trump hinting at a potential US-Europe deal, calling it the 'biggest deal of them all.' European Commission President Ursula von der Leyen will also visit Scotland to negotiate terms. Despite the diplomatic focus, Trump's trip has drawn criticism, with protests expected. Police Scotland has reinforced security with officers from other UK forces to manage demonstrations. - Bernama-PA Media/dpa
Malay Mail
3 hours ago
- Malay Mail
Trump, EU's von der Leyen to meet in Scotland in last-ditch bid to avert transatlantic trade war
BRUSSELS, July 26 — EU chief Ursula von der Leyen and US President Donald Trump said yesterday they would meet in Scotland this weekend in a decisive push to resolve a months-long transatlantic trade standoff. In a drive to slash his country's trade deficits, Trump has vowed to hit dozens of countries with punitive tariff hikes if they do not hammer out a pact with Washington by August 1. The EU—which is facing an across-the-board levy of 30-per cent—has been pushing hard for a deal with Trump's administration, while also planning retaliation should talks fall short. Von der Leyen first announced the meeting, writing on X: 'Following a good call with POTUS, we have agreed to meet in Scotland on Sunday to discuss transatlantic trade relations, and how we can keep them strong.' Arriving on UK soil late Friday, Trump confirmed he would meet the head of the European Commission, which has been negotiating with Washington on behalf of the 27-nation bloc. 'I'll be meeting with the EU on Sunday, and we'll be working on a deal,' he told reporters as he touched down at Prestwick Airport near Glasgow. 'Ursula will be here—a highly respected woman. So we look forward to that,' Trump said. 'We'll see if we make a deal,' added the president—who reiterated earlier comments saying the chance of a deal was '50-50', with sticking points remaining on 'maybe 20 different things.' 'But we're meeting ... with the European Union. And that would be, actually, the biggest deal of them all, if we make it,' he said. The high-level meeting follows months of negotiations between top EU and US trade officials, and days of signals suggesting the sides were moving towards an agreement. According to multiple European diplomats, the agreement under consideration would involve a baseline 15-per cent US levy on EU goods—the same level secured by Japan this week—and potential carve-outs for critical sectors. Von der Leyen's spokesperson Paula Pinho said 'intensive negotiations' had been taking place at technical and political level in the run up to Sunday's meeting. 'Leaders will now take stock and consider the scope for a balanced outcome that provides stability and predictability for businesses and consumers on both sides of the Atlantic,' she said. In Trump's hands Hit by multiple waves of tariffs since Trump reclaimed the White House, the EU is currently subject to a 25-per cent levy on cars, 50 per cent on steel and aluminium, and an across-the-board tariff of 10 percent, which Washington threatens to hike to 30 per cent in a no-deal scenario. The EU wants to avoid sweeping tariffs inflicting further harm on the European economy—already suffering from sluggish growth—and damaging a trading relationship worth an annual 1.6 trillion euros ($1.9 trillion) in goods and services. EU member states gave the European Commission a mandate to pursue a deal to avoid hefty US tariffs, with retaliation held out as a last resort if talks fail. Seeking to keep up the pressure in the final stretch of talks, EU states on Thursday backed a package of retaliation on $109 billion (93 billion euros) of US goods including aircraft and cars—to kick in in stages from August 7 if there is no deal. Most states prefer a deal to no deal—even with undesirable levies of 15 per cent—but exemptions are key, with aircraft, steel, lumber, pharmaceutical products and agricultural goods under discussion, diplomats said. Concerning steel, diplomats say a compromise could allow a certain quota to enter the United States, with amounts beyond that taxed at 50 per cent. Since launching its tariffs campaign, Trump's administration has so far unveiled just five agreements, including with Britain, Japan and the Philippines. While EU hopes have been rising for a deal, the approaching August 1 deadline also comes with a sense of deja-vu: earlier this month, EU officials also believed they were on the cusp of a deal, before Trump hiked his tariff threat to 30-per cent. 'The final decision is in the hands of President Trump,' an EU diplomat stressed this week. — AFP
The Sun
4 hours ago
- The Sun
Economists skeptical of Trump's US beef export claims to Australia
WASHINGTON/CANBERRA/CHICAGO: President Donald Trump said the U.S. will sell 'so much' beef to Australia after Canberra relaxed import restrictions on Thursday, but economists and traders said high prices and tight supplies make major American exports unlikely. Australia said it would loosen biosecurity rules for U.S. beef. The move will not significantly increase U.S. shipments, though, because Australia is a major beef producer and exporter whose prices are much lower, analysts said. U.S. companies export small quantities of beef to Australian buyers. They import much more in the form of lean beef used to make hamburgers, particularly as U.S. production has declined because of tight cattle supplies. U.S. beef prices set records this year after ranchers slashed their herds due to drought that burned up pasturelands used for grazing. The total herd size fell to 94.2 million head as of July 1, a record low for that date, according to U.S. Department of Agriculture data on Friday. A ban on cattle imports from Mexico because of New World screwworm, a devastating livestock pest, and steep tariffs on Brazilian beef that are set to take effect on Aug. 1 could further tighten meat supplies, and require additional imports of Australian beef. 'We can't get enough beef in the U.S. right now, so we're bringing it in from Australia and Brazil,' said Dan Norcini, an independent U.S. livestock trader. 'We're not going to be selling anything significant to anyone.' Last year, Australia shipped almost 400,000 metric tons of beef worth $2.9 billion to the United States, with just 269 tons of U.S. product moving the other way. 'They have more cattle than people,' said David Anderson, an agricultural economist at Texas A&M University. 'That's why they export so much.' DIFFERENT TASTE U.S. and Australian beef also taste different. Many Australians like the grass-fed beef raised there, not marbled beef from U.S.-raised cattle that are generally fed with grain, said Jerry Klassen, chief analyst for Resilient Capital in Winnipeg. He predicted the United States will not export substantial amounts of beef to Australia in the next five years. 'We just aren't in a position to export much beef to anyone, and the reality is Australia doesn't really have much need for U.S. beef,' said Karl Setzer, partner at Consus Ag. The barriers that remain to exporting significant volumes of U.S. beef to Australia appeared to be lost on Trump this week. 'We are going to sell so much to Australia because this is undeniable and irrefutable Proof that U.S. Beef is the Safest and Best in the entire World,' Trump said in a post on Truth Social. 'The other Countries that refuse our magnificent Beef are ON NOTICE.' Trump has attempted to renegotiate trade deals with numerous countries he says have taken advantage of the United States, a characterisation many economists dispute. 'For decades, Australia imposed unjustified barriers on U.S. beef,' U.S. Trade Representative Jamieson Greer said in a statement, calling Australia's decision a 'major milestone in lowering trade barriers and securing market access for U.S. farmers and ranchers.' Australian officials say the relaxation of restrictions was not part of any trade negotiations but the result of a years-long assessment of U.S. biosecurity practices. Canberra has restricted U.S. beef imports since 2003 due to concerns about bovine spongiform encephalopathy (BSE), or mad cow disease. Since 2019, it has allowed in meat from animals born, raised and slaughtered in the U.S. but few suppliers were able to prove that their cattle had not been in Canada and Mexico. The U.S. sources some of its feeder cattle from the two neighboring countries. On Wednesday, Australia's agriculture ministry said U.S. cattle traceability and control systems had improved enough that Australia could accept beef from cattle born in Canada or Mexico and slaughtered in the United States. The decision has caused some concern in Australia, where biosecurity is seen as essential to prevent diseases and pests from ravaging the farm sector. 'We need to know if (the government) is sacrificing our high biosecurity standards just so Prime Minister Anthony Albanese can obtain a meeting with U.S. President Donald Trump,' shadow agriculture minister David Littleproud said in a statement. Australia faces a 10% across-the-board U.S. tariff, as well 50% tariffs on steel and aluminium. Trump has also threatened to impose a 200% tariff on pharmaceuticals. Asked whether the change would help achieve a trade deal, Australian Trade Minister Don Farrell said: 'I'm not too sure.' 'We haven't done this in order to entice the Americans into a trade agreement,' he said. 'We think that they should do that anyway.' - Reuters
