Scott Bessent: let's investigate the Fed

Now that Scott Bessent is looking over the Fed's shoulder, it's time for Jay Powell (and the CBO?) to start worrying. Yes, I know that the Fed is theoretically an independent agency. Yes, I know that the CBO is part of the Legislative Branch. That's why it's called the Congressional Budget Office. Reuters is reporting that "we should examine whether the institution of the Federal Reserve has been a success overall." You'll have President Trump's votes along with the votes of E.J. Antoni, John Carney, Larry Kudlow, Steve Moore and Steve Forbes.

Secretary Bessent sat down for an interview on CNBC's Squawk Box Monday. Secretary Bessent is quoted as saying "What we need to do is examine the entire Federal Reserve institution and whether they have been successful. I'm speaking, actually. I'm going to be in the building this evening. There is a regulatory conference that begins tomorrow. I'm the keynote speaker tonight, talking about regulation."

After that, Bessent unleashed:

The Fed, as well, deals with monetary policy, regulations, financial stability. And again, I think that we should think: has the organization succeeded in its mission? You know, if this were the FAA and we were having this many mistakes, we would go back and look at, "Why has this happened?"

President Trump didn't nickname Powell 'Too Late' Powell just to be mean. He called him that because Powell was too late to raise interest rates when inflation was going through the roof. Powell was too late to start dropping interest rates this spring when Trump defeated Bidenflation. This spring's interest rates have cost young couples tons of money in interest payments. It's cost the U.S. economy lots of money in terms of new homes being built and existing homes getting sold.

Here's part of Bessent's interview:

This is the killer line from the interview:

So, you know, I think this idea of them not being able to break out of a certain mindset—all these PhDs over there—I don’t know what they do. I don’t know what they do. This is like universal basic income for academic economists.

Ouch! That's gotta sting the Fed. Then again, the CBO's performance hasn't been that good, either. Their scoring of tax cuts and deficits created by bills has been atrocious. Their estimate o the deficit that they anticipated for the Tax Cuts and Jobs Act was off by trillions of dollars. How is that acceptable? It's difficult to argue that the CBO has come close in their estimate on the Inflation Reduction Act or the Build Back Better Bill. This has to stop. The predictions for tax cuts are based on static scoring. If you don't use dynamic scoring, you're gonna be off. Bigtime.

The federal government has gotten too used to not getting called out for their mistakes. That's got to stop.