US treasury department demands retraction of story on increased oversight of Federal Reserve | Trump administration
The US treasury department on Friday demanded the Financial Times (FT) retract a report on treasury secretary Scott Bessent’s views on the Federal Reserve, accusing the paper of publishing “false claims” in a formal complaint forwarded to the newspaper’s parent company, Nikkei Inc.
The email from Treasury officials to senior editors at the FT and Nikkei disputed numerous claims in the story and criticized the headline for misrepresenting the underlying story.
The FT reported on March 26 that Bessent had discussed increasing oversight of the Federal Reserve, similar to the Bank of England, which would include regular communication between the Reserve Bank governor and Britain’s chancellor on inflation targets.
Treasury officials denied that Bessent had endorsed such views or discussed adopting similar practices in Washington. They also took issue with the headline, which said Bessent “praised” the Bank of England model for tighter supervision, although it was not included in the body of the story.
“The Minister has never made any of the above statements publicly or privately,” Elliott Hulse, the deputy minister for public affairs, wrote in an email, which was forwarded to the Guardian on condition of anonymity by a person with direct knowledge of the matter.
“The Minister has never ‘discussed tightening the US Treasury’s control over the Federal Reserve by adopting elements of the Bank of England model in a move that would shake up the central bank’s relationship with the government,'” the email said.
“The Secretary never stated, implied or claimed that ‘he might support the UK system where the BoE governor corresponds regularly with the chancellor on the central bank’s inflation target’,” the report added.
In response to questions about the complaint, the FT said they were confident the story was accurate. “We stand by our reporting and have included US treasury responses in the article,” FT spokeswoman Finola McDonnell said in a statement.
The complaint marked the latest effort by treasury officials to discredit the FT report. Bessent on Thursday published his own denials He writes on social media in part: “In short, the FT has literally produced a completely fake policy position for me and the Administration.”
Treasury officials refrained from issuing a legal threat but cited provisions in editors’ codes of practice set up by the UK’s Independent Press Standards Organization, or Ipso, that require publication to avoid misleading or distorted information.
The FT is not a member of Ipso and it is not yet clear whether treasury officials will take further action against the newspaper.
The FT report comes at a time of rising sentiment in financial markets and among treasury officials about the political independence of the Federal Reserve after Donald Trump repeatedly threatened to fire Fed Chairman Jerome Powell for ignoring his demands to cut borrowing costs.
Trump also accused the Fed chairman of mismanaging renovations at the central bank’s headquarters and then lying to Congress about those plans; This led to a criminal investigation and subsequent unease from investors who saw the move as a threat designed to pressure Powell.
Investors care more about the Fed maintaining its independence when making policy decisions than the president’s political preferences. Investors worry that cutting interest rates too aggressively could lead to rapid inflation, which would then require sharp interest rate increases to correct.
