US Treasury's Bessent calls for review of Fed non-monetary policy operations
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 U.S. 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 $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, opens new tab 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 U.S. 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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
27 minutes ago
- Reuters
Morning Bid: Fizzy market week turns flat
LONDON, July 25 (Reuters) - What matters in U.S. and global markets today By Mike Dolan, opens new tab, Editor-At-Large, Finance and Markets A buoyant week for world markets driven by emerging U.S. trade deals with major economies has gone a bit flat into Friday, with the corporate earnings season throwing up a series of high profile disappointments. The interest rate backdrop also turned a shade darker, with the European Central Bank holding its 2% rate steady as expected but with some officials signalling that the bar was high for further easing. Federal Reserve rate cut expectations also continued to tick lower despite relentless political pressure, with futures markets now pricing in just 42 basis points of additional easing this year. * The S&P 500 and Nasdaq eked out marginal gains to new records on Thursday, with Alphabet leading the way after its earnings beat. But Tesla's troubles continued, as it dropped more than 8%. Meanwhile, IBM clocked an 8% earnings day drop, American Airlines fell 10% and Honeywell was off 6%. UnitedHealth lost 5% after a probe into its Medicare practises, and Intel lost 5% overnight on its update. Wall Street futures were flat ahead of Friday's bell. * The European earnings season was also pockmarked with some negative reactions to corporate updates, with shares in German sportswear maker Puma sliding 15% on Friday and French car parts maker Valeo down 9% as both cut full-year outlooks. European stock indexes were down about 0.5%. A rebound in British retail sales last month came in below forecasts too. * A packed diary next week includes the August 1 U.S. tariff deadline, Federal Reserve and Bank of Japan meetings, key U.S. labor market updates, megacap earnings and a heavy Treasury debt auction schedule. Treasury yields were steady to a bit higher on Friday and the dollar nudged up too. Market Minute * Investors cashed out of highly valued global stocks on Friday and the dollar headed for its biggest weekly drop in a month ahead of a crucial week for markets that includes Donald Trump's tariff deadline and key central bank meetings. * U.S. President Donald Trump's trade deal with Tokyo opens scope for the Bank of Japan to raise interest rates again this year, sources say, a prospect the central bank may start to telegraph by offering a less gloomy view on the economic outlook. * South Korea's Industry Minister Kim Jung-kwan met U.S. Commerce Secretary Howard Lutnick on Thursday and reaffirmed a commitment to reach a deal on tariffs by the August 1 deadline, South Korea's industry ministry said on Friday. * The optimism sweeping world stock markets following news of emerging and expected U.S. trade deals is undeniable and understandable. But, writes ROI markets columnist Jamie McGeever, it is also puzzling. * U.S. President Donald Trump sprang a double surprise on the copper market when he announced import tariffs of 50% effective next month. ROI metals columnist Andy Home notes that the market was betting on a different outcome. Weekend reads * GEN AI AND PRODUCTIVITY: The Generative AI boom shows encouraging signs of raising the productivity level, opens new tab of the wider economy, according to a Federal Reserve Board discussion paper. But the researchers conclude that GenAI's contribution to productivity growth will depend on the speed with which its benefits are obtained, and notes that historically it takes time for revolutionary technologies to be integrated into the economy. * SUBNATIONAL DEBTS: Debates about debt sustainability often only focus only on "sovereign" or central government balances and ignore a complex, growing role of subnational governments., opens new tab In a piece on CEPR's VoxEU site, economists Sean Dougherty, Acaua Brochado and Pietrangelo de Biase point out how subnational government accounts for nearly 40% of public investment and more than a quarter of public spending. They argue these entities face tighter borrowing conditions, increasing investment responsibilities and market structures that often fail to price risk accurately. Left unaddressed, these dynamics could undermine both macro stability and government priorities. * DIGITAL SOVEREIGNTY: Europe's systemic dependency on Big Tech's social-media, opens new tab platforms threatens the continent's digital sovereignty as policymakers argue there's little alternative. But, as developer Sebastian Vogelsang argues on Project Syndicate this week, this ignores the potential for building apps on open-source frameworks like the AT Protocol, the foundation for Bluesky. * 'SPY COCKROACHES'?: For Gundbert Scherf - the co-founder of Germany's Helsing, Europe's most valuable defence start-up - Russia's invasion of Ukraine changed everything. As Reuters' Supantha Mukherjee, Sarah Marsh and Christoph Steitz report, the Munich-based company more than doubled its valuation to $12 billion at a fundraising last month. Scherf - a former partner at McKinsey - says Europe may be on the cusp of a transformation in defence innovation akin to the Manhattan Project. * SYRIA'S ECONOMICS: A Reuters investigation found that Syria's new leadership is secretly restructuring an economy broken by corruption and years of sanctions against Assad's government, under the auspices of a group of men whose identities have until now been concealed under pseudonyms. Away from public scrutiny, the committee obtained assets worth more than $1.6 billion. That tally is based on accounts of people familiar with its deals to acquire business stakes and cash seizures, including at least $1.5 billion in assets taken from three businessmen and firms in a conglomerate once controlled by Assad's inner circle. Chart of the day With Fed policy under a microscope, attention switches to the labor market next week - culminating in the release of the national employment report on Friday. Economists polled by Reuters expect the economy added 102,000 non-farm payrolls this month - which would be the lowest monthly tally since February. However, the U.S. Labor Department on Thursday showed jobless claims last week fell to 217,000 - well below estimates - signaling continued resilience in the job market. Today's events to watch * U.S. June durable goods orders (8:30 AM EDT) * U.S. corporate earnings: Aon, HCA Healthcare, Charter Communications, Phillips 66, Centene * South Korea's Finance Minister Koo Yun-cheol and Minister for Trade Yeo Han-koo meet U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in Washington * U.S. President Donald Trump makes private visit to Scotland -- Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
The Guardian
27 minutes ago
- The Guardian
AI-backed medical debt company claims payment plans can help US healthcare costs
The CEO of the artificial intelligence-backed medical debt purchasing company PayZen believes payment plans can be part of the solution to America's high-priced healthcare, even as consumer rights advocates warn third-party financial agreements lack transparency. The company is just one in a sea of healthcare financing companies, whose executives see 'acceleration' in conversations with cash-strapped hospitals facing historic Republican-led healthcare cuts. Signed into law by Donald Trump, the cuts are expected to leave 17 million people without insurance through 2034. As those uninsured people struggle to pay for healthcare, the change is effectively a cut to hospital revenue, and threatens some cash-strapped facilities with closure. 'We believe most people want to pay their bills – they're decent people trying to be responsible,' said Itzik Cohen, PayZen CEO. 'It's not a collections problem – it's an affordability problem.' PayZen's solution is to provide payment plans up to 60-months with 0% interest. 'If you extend the payment plan to three, four, five years … Then more people will pay their bills and successfully,' said Cohen. 'What we're trying to do is make it affordable.' PayZen's business model relies on buying debt from hospitals at a discount, and is backed by venture capital from groups such as New Enterprise Associates, a New York-based firm with big-name partners such as Dr Scott Gottlieb, the president's first-term Food and Drug Administration (FDA) commissioner. NEA and Gottlieb deferred requests for an interview. PayZen may pay as little as 10% and as much as 90% of the value of the bill depending on an AI-backed prediction of whether the patient will pay, according to a 2022 contract with the University of Texas Medical Branch Health (UTMB) at Galveston obtained by the Guardian. The company then collects the full face value of the bill from patients. That same contract shows that PayZen also charges hospitals a transaction based 'platform fee'. 'PayZen charges a 5% platform fee to support outreach, enrollment, underwriting and serving all payment plans,' it reads. Cohen declined to comment on platform fees and said the 5% figure 'is not accurate and is not reflective of how our pricing works'. PayZen is part of an industry of companies, some of which provide interest-bearing financing, that help cash-strapped hospitals with a growing a liquidity problem. 'This is not a new business. It is based on an old model,' said Ge Bai, a healthcare finance professor at Johns Hopkins University's Carey School of Business. 'A hospital takes the unpaid bill to a financial institution, sells these bills to the financial institutions, then the financial institution will give them [the hospital] money immediately… It changes ownership.' Chief among hospitals facing liquidity problems are rural facilities – 153 of which have closed or lost key hospital services since 2010. For these facilities, government cuts, expected to result in an $87bn drop in revenue are only the latest blow. Over the last decade, insurers have increasingly pushed costs onto patients. From 2006 to 2025, the average deductible – an upfront payment that must be made before insurance kicks in – for a single person has grown from $303 to $1,562, outpacing inflation by more than 352%. Those payments represent a hardship for many Americans, more than one-third of whom can't afford an unexpected $400 expense. Unpaid, they also turn into bad debt on a hospital balance sheet. In 2022, people with health insurance became the largest group of patients in debt to hospitals – a sea change in the industry. And those debts, known as 'patient responsibility' or 'self-pay' are very hard for providers to collect. Companies like PayZen come in and pay hospitals up front for bills that might otherwise languish on the hospital balance sheet and become bad debt. 'Because of the growth in high deductible health plans, many people have $2,500, $10,000 [deductibles] for families – so they're really financing so much of their care,' said Richard Grundling, chief mission impact officer at the Healthcare Financial Management Association (HFMA). Consumer advocates question the transparency of such deals for patients. 'I don't think there's any transparency to the patient that PayZen has just acquired this account at a fraction of its face value,' said April Kuehnhoff, senior attorney at the National Consumer Law Center. UTMB Health confirmed that it does not tell patients that PayZen bought their debt at a discount. 'If the hospital was willing to accept this reduced amount, was there a discount that the patient could have accessed by directly paying the hospital instead of paying the full amount to this third party company?' Kuehnhoff asked. Advocates also argue there is a risk that low-income patients, who are often eligible for federally required discounted care, are caught up in payment plans. UTMB Health confirmed that PayZen does not screen patients for what is commonly called 'charity care,' despite performing a 'soft' credit pull and information on their debt and incomes. 'UTMB directs all patients to PayZen to discuss the terms and conditions of the specific agreements with PayZen,' said a spokesperson for the hospital system. 'We provide basic FAQ information, but the relationship is between the patient and PayZen.' Although PayZen relies on purchasing debt, Cohen objects to the label 'debt buyer', which he said refers to companies buying bundles of debt in default. Such companies were highlighted in a segment on John Oliver's Last Week Tonight. 'Calling it debt buying is insulting to patients quite frankly,' said Cohen. 'When you purchase something with a [buy now, pay later] approach, is it debt buying? You're being offered a way to pay for your purchase in a convenient, integrated way that extends payments to you because now you can afford it.' Cohen said his company does not use 'extraordinary collection practices', such as filing debt law suits and objects to describing PayZen as 'buy now, pay later'. 'We never actually called ourselves 'buy now, pay later' for healthcare or 'care now, pay later'.' In fact, Cohen authored a 2021 blog post on the company website headlined: 'PayZen's 'Care Now, Pay Later' Mission.' He later clarified that his company has moved beyond that description. Cohen said PayZen is running a 'pilot' to pre-qualify accounts for charity care, but that only 'two to three' of the roughly 100 healthcare providers it works with participate. Some states require hospitals to screen patients for charity care. If hospitals continue to struggle to collect money from patients, Bai noted that 'hospitals will engage in even more aggressive mechanisms'. 'For example, all upfront payments – no payment, no service – this will happen,' Bai added. UTMB Health instituted one such policy, which was presented in a PayZen-sponsored report as 'masterclass in revenue optimization'. The hospital required patients to pay before seeing a doctor as early as 2019. However, the implementation reportedly led to loud exchanges in waiting rooms, as patients argued they could not afford to pay before seeing the doctor, according to local news outlets. In 2023, UTMB publicly affirmed its payment-first policy, and contracted with PayZen to provide patients with long-term pay plans through its AI-backed debt purchasing model. 'When thoughtfully implemented, pre-service payment policies can significantly increase collections without driving care avoidance,' the PayZen-sponsored report said.
Reuters
42 minutes ago
- Reuters
Indian shares dip; benchmarks hit month-low as earnings, outflows weigh
July 25 (Reuters) - India's equity benchmarks ended at a one-month low on Friday, marking their longest weekly losing streak so far in 2025 as a broad sell-off driven by weak earnings, foreign outflows and global trade uncertainty dented investor sentiment. The Nifty 50 (.NSEI), opens new tab and the BSE Sensex (.BSESN), opens new tab fell 0.5% and 0.4%, respectively, for the week dragged by a 0.9% drop on Friday to close at 24,837 points and 81,463.09 points, respectively. This was their fourth consecutive weekly decline. Eleven of the 16 major sectors declined for the week, with information technology (.NIFTYIT), opens new tab, oil and gas (.NIFOILGAS), opens new tab and consumer goods (.NIFTYFMCG), opens new tab topping sectoral losses. The IT index slid 4.1%, dragged by lacklustre earnings. Infosys ( opens new tab fell 4.4% amid concerns over weak client spending and tepid Q1 commentary. The broader small-cap (.NIFSMCP100), opens new tab and mid-cap (.NIFMDCP100), opens new tab indexes logged weekly losses of 3.5% and 1.9%, respectively. The FMCG index <.NIFTYFMCG> lost 3.4%, also pressured by disappointing results from Nestle India ( opens new tab and Colgate Palmolive India ( opens new tab. Oil and gas (.NIFOILGAS), opens new tab lost 3.5%, dragged by 5.7% drop in heavyweight Reliance Industries on concerns over softness in retail and oil-to-chemicals business. Financials (.NIFTYFIN), opens new tab defied the broader trend, rising about 1% for the week on robust quarterly earnings from HDFC Bank ( opens new tab and ICICI Bank ( opens new tab. "Foreign investors remain uneasy about India's lofty valuations and the underwhelming earnings season hasn't helped," said Santosh Meena, head of research at Swastika Investmart. "The stalled U.S.-India trade deal only deepens market uncertainty." Foreign investors have been sellers in India in nine of the previous 10 trading sessions. Negotiations between India and the U.S. have been hampered by deadlock over tariff cuts, dimming hopes of an interim deal ahead of U.S. President Donald Trump's August 1 deadline. Zomato-parent Eternal ( opens new tab posted its best week on record, rising 20.5% on strong quarterly results. On the day, Bajaj Finance ( opens new tab slid 4.7% on asset quality concerns in the MSME segment, while Cipla ( opens new tab jumped 3% after a strong profit beat.
