Treasury Secretary Bessent Critiques Federal Reserve, Announces Digital Payment Overhaul

Scott Bessent, the current Secretary of the Treasury, has been at the center of major financial news and policy debates in early September Twenty Twenty Five. In the past few days, Bessent publicly criticized the Federal Reserve’s current approach to monetary policy, stating in the Wall Street Journal and in a detailed interview for The International Economy that the Federal Reserve has engaged in risky monetary experiments that have distorted financial markets and undermined its independence. Bessent argued that the Fed’s use of unconventional tools such as quantitative easing should be strictly limited to true emergencies and that its bank supervision powers should be stripped, with the central bank’s focus returning to basic interest rate and inflation targeting. He advocated for a comprehensive review of the entire Federal Reserve institution, including its research and communications functions. According to Bessent, these changes are essential for restoring credibility, political legitimacy, and safeguarding independence, which he believes have been jeopardized by what he refers to as mission creep.

Just as Bessent raised these concerns, tensions continued between the Treasury and the Federal Reserve, especially as President Trump pushed for lower interest rates while criticizing the current Chair Jerome Powell. In contrast to Trump’s more aggressive style, Bessent emphasized a methodical and evidence-based critique of Federal Reserve policy, warning that repeated forecast misses had demonstrated flaws in the Fed’s models, particularly their pessimism about the effects of tax cuts and deregulation.

Meanwhile, the Treasury Department announced a sweeping digital overhaul of federal payments. Starting September thirtieth, Twenty Twenty Five, almost all federal benefits including Social Security, Veterans Affairs, and tax refunds will be paid electronically, with paper checks largely discontinued. This move follows President Trump’s executive order from March and is intended to reduce administrative costs, cut down on fraud, and improve efficiency. Treasury officials estimate millions in annual savings, since paper checks cost much more to produce and process than electronic payments. Those without traditional bank accounts will be provided with government-issued debit cards, expanding financial inclusion and streamlining access to benefits.

Overseas, Bessent also addressed the ongoing conflict with Russia. In an interview on NBC’s Meet the Press, he emphasized that the collapse of the Russian economy, driven by coordinated sanctions and secondary tariffs from the US and Europe, could ultimately bring President Vladimir Putin to negotiate. He urged European partners to stand firm and support broader measures, stating that increased pressure remains a shared goal.

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