ARLINGTON, VIRGINIA: US Treasury Secretary Scott Bessent said on Monday (Sep 1) that the Federal Reserve is and should remain independent but argued it has “made a lot of mistakes,” while defending President Donald Trump’s right to fire Fed Governor Lisa Cook over mortgage fraud allegations.
Bessent also expressed confidence that the Supreme Court will uphold Trump’s use of emergency powers to impose sweeping tariffs, though he acknowledged the administration has a backup plan if the courts strike them down.
FED INDEPENDENCE DEBATE
“The Fed should be independent. The Fed is independent, but I, I also think that they’ve made a lot of mistakes,” Bessent told Reuters in an interview at a diner outside Washington.
Trump last week fired Cook, the first Black woman to serve on the Fed’s Board of Governors, after William Pulte, head of the Federal Housing Finance Agency, accused her of mortgage fraud. The Justice Department has not filed charges.
Bessent said Cook should resign if the allegations are true and questioned why the Fed had not conducted its own review. “She hasn’t said she didn’t do it. She’s just saying the president can’t fire her. There’s a big difference,” he said.
Cook has denied wrongdoing and is suing Trump and the Fed, arguing the president lacks legal authority to remove her. Her supporters contend the allegations are a pretext to let Trump appoint an ally to push his economic policies.
Independent central banks are widely seen as crucial for financial stability, and Trump’s interventions have raised questions about Fed autonomy. But Bessent dismissed concerns. “The S&P’s at a new high and bond yields are fine. So we haven’t seen anything yet,” he said.
