The Treasury just lit a fuse under the Fed. On July 21, Treasury Secretary Scott Bessent went on CNBC and did not hold back. He called for a sweeping review of the entire Federal Reserve system. Not just interest rates. Not just monetary policy. The entire institution. His words were blunt. “All these PhDs over there, I don’t know what they do.”
The breaking point was not inflation. It was the Fed’s $2.5 billion headquarters renovation. Two buildings. 402,000 square feet. Over $6,200 per foot. The project was approved in 2021 and is now over budget. Meanwhile the Fed has posted operating losses of $1.6 trillion under Jerome Powell. That number is real. It is in the books.
🚨 BREAKING: Treasury Secretary Scott Bessent demands a THOROUGH REVIEW of the “ENTIRE Federal Reserve System.”
YES. Audit the Fed.
“All these PhDs over there, I don’t know what they do!”
“What we need to do is examine the entire Federal Reserve institution, and whether they… pic.twitter.com/MZYVGG2ay6
— Eric Daugherty (@EricLDaugh) July 21, 2025
Bessent’s remarks were not isolated. Treasury followed with a press release. He said the Fed’s non-monetary functions have grown unchecked and called it “mission creep.” He wants a full internal review. Not just of costs. Of structure. Of purpose. Whether the Fed is actually meeting its mandate.
Congress is already acting. On July 17, Senators Rand Paul and Rick Scott reintroduced the Federal Reserve Transparency Act. It orders the GAO to audit the Board of Governors and every regional bank. The audit must be completed within 12 months. Congress must be given the results within 90 days. Sponsors include Cruz, Blackburn, Risch, Young, and Barrasso.
Rick Scott did not mince words. “Powell has been a total disaster at the Federal Reserve,” he said. He blamed the $1.6 trillion in losses on failure and pointed to the renovation project as proof the institution has lost touch. He also flagged ethics issues and regulatory missteps.
Critics are now piling on from the states. Florida’s Rep. Anna Paulina Luna referred Powell to the DOJ for alleged perjury related to the renovation. Analysts in Kentucky say the Fed’s budget has drifted far from reality. Economists in Texas are calling the Fed’s 22,000 employees a bloated bureaucracy. Before the Fed existed, the inflation rate averaged 0.4%. Since then it has averaged 3.2%. That is not price stability. That is erosion.
Now the Fed’s independence is in the spotlight. Bessent said monetary policy should stay protected. But everything else is fair game. Staff budgets. Real estate spending. Bureaucratic expansion. All of it is being questioned.
Two central banks have already been shut down in U.S. history. The Federal Reserve is not guaranteed a different fate. If it fails its mandate, it can be dismantled. The black box is cracking. The pressure is building. The books are open.
Sources
https://www.paul.senate.gov/senator-rand-paul-reintroduces-audit-the-fed-bill/
https://www.politico.com/news/2025/07/21/bessent-fed-powell-trump-inflation-00465434
