Treasury Secretary Bessent Urges Fed Audit Amid $2.5B Renovation 28% Overrun and Governance Skepticism

Treasury Secretary Scott Bessent has publicly urged the U.S. Federal Reserve to undergo a comprehensive internal audit, citing concerns over its expanding operations and lack of accountability. Speaking during appearances on CNBC and Fox Business, Bessent described the Fed as “spiraling out of control” and argued that an independent review is necessary to address growing governance challenges. His comments reflect broader skepticism from the Trump administration toward the central bank’s autonomy and decision-making processes.

Bessent emphasized the need to evaluate the Fed’s institutional framework, including its financial expenditures and operational scope. A key point of criticism centers on the controversial $2.5 billion renovation of the Fed’s Washington, D.C. headquarters, which faced a $700 million budget overrun. The project has drawn accusations of fiscal mismanagement and even perjury, with lawmakers like Republican Anna Luna alleging that Fed Chair Jerome Powell misrepresented details during congressional testimony. These controversies, along with Trump’s public frustration over Powell’s reluctance to cut interest rates, have intensified calls for oversight.

While Bessent has not demanded Powell’s resignation, he acknowledged the chair’s “good public service” record and expressed confidence in his ability to lead a restructuring effort. “I’m calling for an internal review,” Bessent stated, stressing that such a process could help “right-size the non-monetary functions of the Fed.” This framing underscores a strategic focus on recalibrating the Fed’s role rather than dismantling its independence. However, the proposal has reignited debates about the boundaries of the Fed’s autonomy, a principle enshrined in its founding legislation to insulate monetary policy from direct political influence.

The Trump administration’s push for an audit aligns with its broader emphasis on fiscal responsibility and accountability in federal operations. Critics of the Fed, including Wyoming Senator Cynthia Lummis, have also raised concerns about its regulatory approach, particularly its alleged efforts to marginalize cryptocurrency companies through initiatives like “Operation Choke Point 2.0.” These allegations, while not directly tied to the audit request, highlight a wider distrust of the Fed’s influence over financial markets and banking practices.

Despite these pressures, the Fed’s independence remains a cornerstone of U.S. monetary policy. Defenders argue that political interference could undermine the central bank’s effectiveness in managing inflation and stabilizing the economy. The potential audit, if implemented, would need to balance transparency with the Fed’s operational discretion. While the Treasury has not outlined specific parameters for the review, the move signals a shift in the administration’s approach to central bank oversight, reflecting its broader agenda to consolidate executive authority over financial policy.

As the debate unfolds, the audit request could test the Fed’s resilience in maintaining its non-partisan mandate. The outcome may shape future interactions between the Treasury and the Fed, particularly if the review leads to structural changes or policy recommendations that challenge the central bank’s autonomy. For now, Bessent’s call for accountability underscores a pivotal moment in the ongoing dialogue about the Fed’s evolving role in the U.S. economy.