The Federal Reserve has endured many insults from the Trump administration, but a new line of attack opened up last month when the Treasury secretary himself accused it of presiding over the monetary equivalent of a lab-created virus outbreak.
Writing in The International Economy magazine, Scott Bessent compared the “extraordinary” monetary policy tools used by the Fed after the financial crisis to scientific research that has gone awry. “[Lab experiments] can wreak havoc in the real world,” he said. “Once released, they cannot easily be put back into the containment zone.”
In Bessent’s argument, it was unacceptable “mission creep” for the Fed to use massive purchases of assets to stimulate growth, the policy known as quantitative easing. Instead, he wrote, the central bank needs to return to a far simpler toolkit.