Federal Reserve Faces Scrutiny for Operational Overhaul

Key Points

1. Scott Bessent emphasized that the Federal Reserve’s expanding role and budget since 2004 necessitate an operational review.

2. Bessent suggested that an independent body or external experts could conduct the audit, similar to the Bank of England’s self-review in 2022.

3. The call for an internal audit is supported by experts who believe it could strengthen the Fed’s transparency and accountability.

4. Criticism of the Fed includes concerns about its autonomy and the potential damage to its independence from shifting away from monetary policy.

5. Larry Summers shares Bessent’s view on the need for a review of the Fed’s operations.