Treasury Secretary Scott Bessent said Thursday he wouldn’t be commenting on the Federal Reserve’s interest rate policies and expressed confidence in the central bank Chair Jerome Powell, breaking from earlier criticisms.
In an interview with Bloomberg TV, Bessent said he expects Fed Chair Powell “will do the right thing” despite his and President Trump’s past skepticism of the bank chief.
“Everything I’m going to talk about is things that the Fed’s done in the past. Prospectively, monetary policy, I will not comment on,” he said.
“There will be no criticism,” he added.
Last year, Bessent floated the idea of having a “shadow Fed chair,” an idea modeled on British politics, in which the opposition party names a shadow cabinet that advances policy alternatives.
“You could … create a shadow Fed chair,” Bessent told Barron’s. “And based on the concept of forward guidance, no one is really going to care what Jerome Powell has to say anymore.”
Trump frequently blasted Powell — one of his own appointees — during his first term, breaking with precedent. During the 2024 presidential campaign, Trump again took aim at Powell, weighing in on monetary policy, long held to be the purview of the independent Fed.
But over the summer, as the unemployment rate jumped and Fed signalled coming interest rate cuts, Trump backed off, saying he would let Powell finish out his term.
The beef reignited once again after the Fed held interest rates steady, rather than continuing with cuts, at its most recent meeting, following a three-month uptick in inflation.
“Because Jay Powell and the Fed failed to stop the problem they created with Inflation, I will do it by unleashing American energy production, slashing regulation, rebalancing international trade, and reigniting American manufacturing,” Trump wrote on social media.
Powell said following the meeting that he’s had “no contact” with Trump and didn’t want to respond to criticisms.
“I’m not going to have any response or comment whatsoever on what the president said. It’s not appropriate for me to do so,” he said. “The public should be confident that we will continue to do our work as we always have, focusing on using our tools to achieve our goals.”
Trump later ceded that the Fed and Powell did “the right thing” by keeping rates steady last month.
