After describing Federal Reserve Chairman Jerome Powell as "a good public servant," Bessent reiterated the call for a comprehensive internal review of the central bank's operations.

Should the Fed Face a Comprehensive Audit? Bessent Thinks So

Treasury Secretary Scott Bessent stated that the Federal Reserve is out of control and needs a comprehensive internal audit to curb the uncontrolled expansion of its growing activities. Bessent made these comments in an interview with CNBC on Monday and on Fox Business on Tuesday.

"What we need to do is take a look at the entire Federal Reserve organization and see if they are successful or not," Bessent explained on Monday. The Treasury Secretary appeared in another interview on Tuesday and further explained his earlier message. "Everything else the Fed has done over the years has grown increasingly, and this is what happens when there is no oversight," he said.

At the forefront of everything is Fed Chairman Jerome Powell, who has been accused of misconduct, poor financial management, and incompetence by some members of the Trump administration, including the president.

Powell has decided to maintain the central bank's target interest rate in the range of 4.25% to 4.50% since December 2024, the nearest rate cut. His reluctance to lower interest rates has angered U.S. President Donald Trump, who wants to reduce interest rates to alleviate the national debt estimated at about $1 trillion, which currently stands at $36.67 trillion.

"The U.S. is very strong, INFLATION IS VERY LOW, and we deserve to reach 1%, saving a trillion dollars a year on interest costs," Trump wrote on Friday. "I can't express how stupid 'Too Late' is – It's bad for our country!" The nickname "Too Late" given by the president refers to Powell's reluctance to cut interest rates.

But aside from the stance on interest rates, Powell is facing sharp criticism for the $2.5 billion renovation of the Fed headquarters in Washington, D.C., including a $700 million budget overrun. This controversial renovation has led to allegations of financial misconduct. After defending the project in a congressional hearing, Powell was later accused of lying about key details of the renovation by Republican Congresswoman Anna Luna in the Florida House.

Wyoming Senator Cynthia Lummis has also criticized the Fed Chairman for deliberately stripping powers from cryptocurrency companies by abusing the Fed's influence over U.S. banking. Lummis accused the Fed of classifying cryptocurrencies as a source of reputational risk for banks in a government-wide effort under Biden called "Operation Choke Point 2.0" aimed at undermining cryptocurrency companies.

All these developments seem to have led Bessent to conclude that Powell may have good intentions, but perhaps the expanding scope of the Fed's responsibilities has exceeded Powell's ability to manage the central bank.

"I know Chairman Powell. There is nothing that makes me think he should resign right now. He is a good public servant," Bessent explained. "I am calling for an internal review... and I trust Chairman Powell that if he does this, we can readjust the non-monetary functions of the Fed."