Bessent says Powell doesn't need to resign but should conduct internal review

Powell's Tightrope Walk: Will the Fed Chair Survive the Political Storm?

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**Imagine this:** The Federal Reserve, the nation's financial bedrock, is facing a political earthquake. Its chairman, Jerome Powell, is caught in the crosshairs, battling calls for his resignation amidst a maelstrom of criticism and conflicting opinions. Will he weather the storm? This gripping saga reveals the intense pressure on the Fed and its leader.

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A President's Fury, a Secretary's Dilemma

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President Trump's open calls for Powell's resignation are legendary. He's publicly voiced his frustration, demanding drastic interest rate cuts. But Treasury Secretary Scott Bessent offers a surprising counterpoint. While Bessent advocates for a comprehensive review of the Federal Reserve's operations—a move spurred by concerns about ballooning costs like the $2.5 billion building renovation project with significant cost overruns—he stops short of demanding Powell's ouster.

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"I know Chair Powell," Bessent stated on Fox Business. "He's been a good public servant." But is this enough to quell the political firestorm? The question hangs heavy in the air. Bessent's suggestion? An internal review, separating monetary policy—the delicate art of setting interest rates—from other Fed functions, shielding it from undue political pressure. He envisions this as a "jewel box," preserving its integrity. This internal review, Bessent argues, could be Powell's chance to solidify his legacy. But will Powell accept this challenge?

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The Fed's Tightrope: Independence vs. Accountability

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The pressure isn't solely from the White House. Even within the Federal Reserve, opinions are divided. Fed Governor Michelle Bowman, while advocating for the Fed's crucial independence in setting monetary policy, underscores the need for transparency and accountability. This delicate balance—maintaining independence while remaining accountable—is a tightrope walk for the entire institution. **What's at stake?** The future of the American economy. Markets are anxiously watching. While most expect the Fed to hold interest rates steady at 4.25%-4.5% in the upcoming meeting, whispers of a September rate cut are growing louder, fueled by CME Group futures data. The Ticking Clock: Powell's Choice With Powell's term ending in May, the question of his future remains unanswered. Will he weather this unprecedented political pressure? Will he lead the internal review Bessent suggests, potentially shaping his legacy? Or will he succumb to the mounting pressure and choose to step down? The stakes are incredibly high, and the answer will impact every American. Stay tuned for the next chapter in this unfolding drama. The future of the Federal Reserve—and potentially, the economy—hangs in the balance.