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Forget the drama about whether Trump fires Powell. That’s the sideshow. The real risk to markets is what happens if the Federal Reserve itself gets cracked open and reworked. That’s the conversation no one wants to have, but it’s happening now… loudly. This isn’t just about one guy at the top. It’s about the entire machine behind him. Scott Bessent, the U.S. Treasury Secretary, made that clear Monday. Speaking to CNBC, Scott said the Fed’s recent performance deserves a top-to-bottom review. He attacked what he called their “fear-mongering over tariffs,” even though there’s been no real inflation spike. “What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” he said. “All these PhDs over there, I don’t know what they do.” Trump allies ramp up pressure on the Fed This isn’t some rogue rant. It’s part of a broader offensive from the Trump administration. While Trump has been hammering Powell for not cutting rates fast enough, Scott’s comments added a new layer. And the timing couldn’t be more deliberate. Markets have been rattled for weeks over speculation that Trump might fire Powell, something legally tricky but politically explosive. But here’s the thing: Powell alone doesn’t run the Fed. He’s one vote. The rate-setting body, the Federal Open Market Committee (FOMC), is made up of twelve people, seven board members and five regional Fed presidents. Each year, the committee picks its own chair and vice chair. By tradition, the Fed Chair holds that position. But that’s not mandatory. If the rest of the FOMC wanted to block a politically charged appointment, they technically could. This system was built for moments like this, to shield monetary policy from political pressure. But even with that structure in place, the risk now is that the Fed…

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Filed under: News - @ July 22, 2025 5:31 pm