Image Source: Pexels

In a CNBC interview yesterday, Bessent called for a review of the Fed.

Reuters reports:

US Treasury’s Bessent calls for review of Fed non-monetary policy operations

“U.S. Treasury Secretary Scott Bessent said the Federal Reserve’s vital independence on monetary policy is threatened by its “mandate creep” into non-policy areas and he called on the U.S. central bank to conduct an exhaustive review of those operations.

The Fed’s autonomy “is threatened by persistent mandate creep into areas beyond its core mission, provoking justifiable criticism that unnecessarily casts a cloud over the Fed’s valuable independence on monetary policy,” Bessent said in a post on X.

He called Fed monetary policy “a jewel box” that should be walled off to preserve its independence, which he called a cornerstone of continued U.S. economic growth and stability.”

A review and re-organization of the Federal Reserve is in Bessent’s favor.

Because whenever there is a massive institutional change, there is an opportunity to influence what that new institution looks like…

And Bessent better get moving because he needs the Federal Reserve to print money.

According to @TheKolbessiLetter on X, this year, $9.2 Trillion in debt will either mature or need to be re-financed, which is just about 25% of the total US debt.
 

This means that the US Treasury will need to borrow more money from the Federal Reserve to re-finance the debt. Lower interest rates would lower that burden, and it would lower the rising cost to service the existing $37 Trillion US debt.

But, Bessent will also need to increase demand for US Treasury Bonds if he is going to have a chance of keeping bond yields stable.

The 30-Year Treasury bond is already heading back above 5%.
 

So far, the one solution Bessent has presented to make US Treasury bonds marketable is this…

Stablecoins.

I wrote about this last week, but Bessent’s enthusiasm for stablecoins and their ability to generate demand for US Treasuries has been well documented from the beginning.

🇺🇸 BULLISH: Bessent says stablecoins could create $2T of demand for US Treasurys.

“We are going big on digital assets.” pic.twitter.com/FCC0MSRvHE

— Cointelegraph (@Cointelegraph) May 24, 2025

The plan for stablecoins goes beyond simply paying for, or re-financing US debt. Bessent benefits from narrowing the Fed’s mandate, and surveillance on fiscal policy to its “original mandate” because the US Treasury will track where and when US Treasury bonds are sold to deliver stablecoins. Such pervasiveness of stablecoins globally will radically empower Bessent’s office and institution while reducing the power of the Federal Reserve.

Who is the Fed to say no when there is such high demand for US Treasuries? Any corporation that wants to issue stablecoins, anywhere around the globe will most likely be able to issue them. What this really is… Is a quiet play toward fiscal dominance while saying the Fed “needs a review.”

Bessent needs lowered rates and he needs to market his treasuries.

So, he doesn’t want a review of the Fed. He wants the Fed.

More By This Author: