US Treasury Secretary Scott Bessent said on Tuesday that there was no reason for a resignation immediately from the President of the American Central Bank (Fed), Jerome Powell, who has been under political pressure for several months.
“Nothing comes to tell me currently that he should resign,” said Bessent, interviewed Fox Business.
The mandate of Mr. Powell at the head of the Federal Reserve (Fed) had to end in May 2026. He always said he wanted to go after this mandate.
The secretary of the Treasury seemed to calm the game a little Tuesday vis-à-vis the boss of the Fed, which is the subject of repeated attacks, especially on the part of the American president Donald Trump.
The latter, who nicknamed Mr. Powell “too late”, believes that the Fed should have already lowered its rates by three percentage points to support the American economy, judging that such a decrease would save “$ 1,000 billion” in interest on public debt, without specifying on what period.
Monday, Mr. Bessent had himself judged that it was necessary to “examine the Fed institution as a whole and [s’]ensure that it was effective ”. “We have to ask ourselves: did the organization succeed in carrying out its mission?” He said.
The Fed has a double mandate, which consists in maintaining American inflation around 2% in the long term while ensuring the conditions to maintain full employment in the United States.
But, considering that the second objective was currently fulfilled, the Fed has made the choice of concentrating on inflation for several months, retaining high rates, between 4.25% and 4.50%, as long as prices have not returned sustainably around 2% annual increase.
The ICC inflation measurement index, on which the pensions of Americans are indexed, has indeed rose to 2.7% over one year in June, compared to 2.4% in May.
Trump threatened last week to fire Mr. Powell, before finally seemed to give it up.
According to the daily Wall Street Journal, this decline would have occurred after a conversation with Mr. Bessent, who sought to dissuade the American president. This information was denied Monday by the Treasury Secretary on CNBC. But on the same day, Mr. Bessent considered on the social network X that the Fed had “lost sight of its independence with regard to its main monetary policy mission”.
“This autonomy is threatened by a persistent evolution of his mandate which leads him to interfere in fields beyond his main mission,” added Mr. Bessent, which causes “justifiable criticisms that unnecessarily harm his precious independence”, without specifying in what areas he was alluding to.
