Bessent Claims Fed Loses $100-B Yearly Sans “Accountability”

As the nation’s central bank, the Federal Reserve plays a critical role in the US economy.

As rates rose, the central bank began paying out more in interest on bank reserves, while income from its long-term securities portfolio remained comparatively low.(Photo: The White House)

But Treasury Secretary Scott Bessent is sounding the alarm about how the institution is being run — and is taking direct aim at its chair, Jerome Powell, Jing Pan reported for Moneywise.

“On Chair Powell’s watch, the Fed is now losing $100 billion a year — $100 billion with no accountability,” Bessent said in a recent interview with Newsmax, adding that the US “had the worst inflation in 49 years.”

Though not quite 49 years, US inflation did reach its highest levels in decades, with the consumer price index peaking at 9.1% in June 2022 during the COVID-19 pandemic — the highest annual rate since November 1981.

Meanwhile, the latest Bureau of Labor Statistics data placed inflation at 2.7% year over year, a better result than forecast.

Bessent reiterated the annual loss figure in a separate interview with CNBC, arguing that “the Federal Reserve is now losing $100 billion a year because of mistimed asset purchases,” calling the outcome “a big mistake.”

Analysts at the Institute for New Economic Thinking have noted that the Fed is running losses “at more than $100 billion a year on an annualized basis” due to sharp rises in short-term interest rates.

As rates rose, the central bank began paying out more in interest on bank reserves, while income from its long-term securities portfolio remained comparatively low.