New Fed Chair should be able to examine organization, Bessent says - Nikkei

Investing.com - The new chair of the Federal Reserve should be a person who can examine the "whole organization" because the central bank’s broad mission has gone beyond monetary policy and threatened to dent its independence, U.S. Treasury Secretary Scott Bessent has said.

Speaking to the Nikkei newspaper in Japan, Bessent added that the person who will replace current Fed Chair Jerome Powell will be someone "who has the confidence of the markets" and "the ability to analyze complex economic data."

Bessent also said it would be a candidate who "wants to be, I think, very attuned to forward thinking, as opposed to relying on historical data."

Reuters has reported that Bessent is conducting a search for the person to replace Powell’s when his term at the head of the U.S. central bank ends next year.

The statements come as Powell has become the frequent recipient of criticism from U.S. President Donald Trump, who has been calling on the Fed to quickly and aggressive slash interest rates to help boost the economy. Powell, however, has remained largely steadfast in his backing of a more cautious approach to calibrating rates.

Asked about Trump’s comments on Powell, Bessent told Nikkei that even though Trump is making his opinion known, the Fed is ultimately an independent body.

Separately, Bessent stressed that the White House’s definition of a strong dollar was linked to the relative price of the greenback against other currencies. With this in mind, he was quoted by the Nikkei as saying: "If we have good economic policies, then the dollar will naturally be strong."

The Treasury Department has previously argued for the Bank of Japan to continue tightening monetary policy, saying it will help a "normalization" of weakness in the Japanese yen.

Despite exiting a longstanding period of stimulus by raising interest rates earlier last year amid expectations that Japan’s inflation rate had sustainably touched its 2% target, the BOJ has adopted a more careful attitude to further hikes -- a stance that some analysts have said has contributed to a weaker yen.

Bessent, for his part, said BOJ Governor Kazuo Ueda and the central bank’s board are targeting an "inflation outcome, not a currency outcome."