The U.S. Treasury Secretary noted that by failing to meet its inflation mandate, the central bank has deepened class and generational divides.
U.S. Treasury Secretary Scott Bessent on Friday said that the Federal Reserve is putting its own independence at risk by operating under what he called a “gain of function” monetary policy.
In an opinion piece for The Wall Street Journal, Bessent argued that the central bank’s “policy experiment” includes overuse of nonstandard policies, mission creep, and institutional bloat, which threaten its independence. “The Fed must change course,” he wrote, contending that its toolkit has become too complex and depends on uncertain theoretical foundations.
Bessent added that by failing to meet its inflation mandate, the Fed has deepened class and generational divides. He said its strategy of chasing a wealth effect to drive growth ultimately backfired, undermining confidence in the institution’s ability to balance economic stability with political independence.
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