Fed criticism reignites debate over Jerome Powell's succession

• Scott Bessent criticizes Fed mandate expansion
• Trump pushes for $2,5 billion overhaul
• Powell remains in office, but succession gains momentum

U.S. Treasury Secretary Scott Bessent stepped up his criticism of the Federal Reserve by calling for a complete reassessment of the institution's role, warning that its involvement outside of monetary policy threatens the central bank's autonomy. In a post on the X platform, Bessent argued that "mandate creep" jeopardizes the Fed's independence by expanding its responsibilities into non-core areas.

Today in a CNBC interview, I called for a review of the Federal Reserve. It is my belief that the central bank should conduct an exhaustive internal review of its non-monetary policy operations. Significant mission creep and institutional growth have taken the Fed into areas that…

— Treasury Secretary Scott Bessent (@SecScottBessent) July 21, 2025

According to him, monetary policy should remain the primary focus. "The Fed's autonomy is threatened by the persistent expansion of its mandate into areas beyond its core mission," Bessent said. The statements come at a time when current Fed Chairman Jerome Powell is facing increasing political pressure, especially from President Donald Trump.

Part of the dissatisfaction stems from the $2,5 billion renovation project for the Fed's Washington headquarters. Although approved in 2017, its high cost has been heavily criticized. Trump called the initiative "potentially fraudulent" and suggested Powell's resignation. Bessent, however, declined to comment on the legal aspect of the case, but pointed out the inappropriateness of the spending given the central bank's operating losses.

Despite the criticism, Powell remains in office thanks to the Supreme Court's ruling that his removal can only occur for just cause, not political reasons. His current term runs until May 2026. In response to the criticism, Powell defended the reform, justifying it based on structural, safety, and hazardous materials removal needs.

Behind the scenes, Bessent has been touted as a possible successor to Powell. Although he avoids confirming any plans, his growing visibility and alignment with the president fuel speculation. "If we were at the FAA and making so many mistakes, we would go back and see why," he said in an interview with CNBC, comparing the Fed's failures to those of other federal agencies.

The debate reignites discussions about the institutional limits of the Federal Reserve, bringing into question not only its economic policy, but also how it responds to society and the Executive Branch.