Treasury Secretary Scott Bessent criticized the Federal Reserve, calling for a thorough investigation into its effectiveness. He questioned if the Fed has met its mandate, comparing the need for scrutiny to safety reviews in agencies like the FAA. Bessent accused the Fed of 'fear-mongering' regarding President Trump's tariffs, highlighting that inflation rates have remained low despite warnings. He expressed concern over what he perceives as intellectual rigidity at the central bank and noted that tariffs may create varied economic impacts, potentially generating substantial revenue over the next decade.
What we need to do is examine the entire Federal Reserve institution and whether they have been successful. Has the organization succeeded in its mission? If this were the [Federal Aviation Administration] and we were having this many mistakes, we would go back and look at why has this happened.
There was fearmongering over tariffs, and thus far, we have seen very little, if any, inflation. We've had great inflation numbers.
Inflation has widely not materialized as much as economists and the Fed have warned, and economists have been working to solve the $100 billion mystery.
Morgan Stanley has described the tariffs as a developing 'mosaic' with 'idiosyncratic' effects on the economy, poised to generate $2.7 trillion over the next decade.
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