🚨 U.S. Treasury Secretary Slams Federal Reserve: “Models Failed, Predictions Wrong — Leadership Shake-Up Coming in December”

The Federal Reserve announced a 25 basis-point rate cut, but the move immediately drew fire from Treasury Secretary Basent, who accused the Fed of being “stuck in the past.”

Basent argued that the central bank’s forecasting models have failed, its inflation and growth projections are consistently off, and its response to economic shifts remains far too slow.

He revealed that a second round of interviews will take place in December to select Jerome Powell’s successor before Christmas — signaling that a leadership transition at the Fed is already underway.

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⚡ Basent’s Three Core Criticisms

1️⃣ Rate cuts are too cautious — the Fed is reacting too slowly to turning points.

2️⃣ Policy divisions are widening, fueled by delayed data and indecision.

3️⃣ Outdated models — unable to capture real employment and inflation dynamics.

Basent said the U.S. needs a new Fed chair willing to break from old frameworks and rebuild the decision-making process from the ground up.

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🏛️ Powell’s Response & Market Fallout

At his press conference, Chair Jerome Powell defended the Fed’s approach, stressing “caution amid disagreement” and citing the ongoing government shutdown for creating data gaps.

Basent’s remarks, however, deepened market unease — highlighting a growing rift between the Treasury and the Fed and raising speculation that the Trump administration is preparing a policy realignment.

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📊 Market Takeaway

The 25 bps cut has done little to calm investors.

Attention has now shifted from interest-rate projections to the question of leadership — who will lead the Federal Reserve next?

Basent made it clear: this isn’t about a mild adjustment.

It’s about a systemic overhaul of the institution at the heart of U.S. monetary policy.