Bessent says White House may ‘veto’ Federal Reserve presidents
WASHINGTON (AP) — Treasury Secretary Scott Bessent said Wednesday that the Federal Reserve will implement a new requirement that regional bank presidents live in their districts for at least three years before taking office; This could give the White House more power over the global economy. independent agency.
“There’s a disconnect with the Federal Reserve’s framework,” Bessent said in comments at the New York Times’ DealBook Summit, adding: “Unless someone lives in their district for three years, we’re going to veto them.”
Bessent has intensified his criticism of the Fed’s 12 regional bank presidents in recent weeks after several of them publicly called it out in a speech. serial speech He said they oppose a rate cut at the Fed’s next meeting in December. President Donald Trump harshly criticized the Fed for not lowering short-term interest rates faster. When the Fed lowers the interest rate, it can reduce borrowing costs for mortgages, auto loans, and credit cards over time.
The possibility of the administration “vetoing” regional bank presidents would represent another effort by the administration to exert greater control over the Fed, an institution traditionally independent of day-to-day politics.
The Federal Reserve aims to keep prices in check and support hiring by setting a short-term interest rate that affects borrowing costs across the economy. It has a complex structure that includes a seven-member board of directors based in Washington as well as 12 regional banks covering specific regions of the United States.
Seven governors and the president of the New York Fed vote on every interest rate decision, while four of the remaining 11 presidents vote on a rotating basis. But all presidents attend meetings of the Fed’s interest rate-setting committee.
Bessent argued in an interview with CNBC last month that the goal of regional Fed banks is to bring their regions’ perspective to the Fed’s interest rate decisions and “break the New York constraint” on setting interest rates.
But now, he said last month, “three, maybe four” of Fed chairmen were appointed from outside their districts, and some of them live in New York.
“I’m not sure the Federal Reserve was designed that way,” he said in the interview.
