BURSTTreasury Secretary Scott Bessent on Monday defended the independence of the Federal Reserve but insisted President Trump has the right to fire Fed governor Lisa Cook over mortgage fraud allegations.
"The Fed should be independent. The Fed is independent, but I, I also think that they've made a lot of mistakes," Bessent said in an interview with Reuters on Monday.
Trump moved to fire Cook, an appointee of former President Biden’s, after allegations were surfaced by the head of the Federal Housing Finance Agency (FHFA), who is an ally of the president, that Cook committed mortgage fraud by listing two primary residents in official documents.
The president has authority to fire members of the Federal Reserve board of governors for cause, but it’s unclear whether the allegations against Cook reach that standard. Cook has sued Trump over his “unprecedented and illegal attempt” to remove her from her position.
Bessent pushed back when asked whether the Trump administration’s efforts to remove Cook from her post appeared to be an effort to allow the president to appoint a majority on the board of governors.
"Well, or is it you're having to do the Fed's job for 'em?" Bessent said in response.
Bessent also told Reuters the president could not “stack” the board because the makeup of the board includes regional bank governors.
Trump for months has publicly criticized Fed Chair Jerome Powell and has pushed him to lower interest rates. Trump has publicly toyed with the idea of firing Powell and reportedly told GOP lawmakers in July he could soon move to fire Powell, before walking back those remarks.
A Wall Street Journal report shortly thereafter alleged Bessent personally sought to dissuade Trump from firing Powell, making the case that such a move could negatively affect the economy and get tied up in court battles for months. He also noted at the time that the Fed could be moving toward cutting rates later in the year.
Trump slammed the report as untruthful and Bessent downplayed his role in Trump’s decision, saying the president “solicits a whole range of opinions and then makes a decision.”