In a week marked by heated debate over the future of U.S. monetary policy, Treasury Secretary Scott Bessent has stepped into the spotlight, defending President Donald Trump’s controversial firing of Federal Reserve Governor Lisa Cook and outlining the administration’s next moves as it seeks to reshape the leadership of the central bank. The developments, which unfolded at the start of September 2025, have sent ripples through financial and political circles, raising urgent questions about the independence of the Federal Reserve and the direction of the nation’s economic policy.
Speaking to Reuters on September 1, Bessent reaffirmed the longstanding principle that the Federal Reserve should operate independently, but he did not shy away from criticizing its recent decisions. “The Fed should be independent. The Fed is independent, but I, I also think that they’ve made a lot of mistakes,” Bessent said. His remarks come amid growing scrutiny of the central bank’s actions, especially as Trump and his allies have repeatedly pressured the institution to lower interest rates in hopes of boosting economic growth and easing the burden of the $37 trillion national debt.
The controversy reached a boiling point last week when President Trump fired Lisa Cook, the first Black woman to serve on the Federal Reserve Board of Governors. The dismissal followed a public accusation from William Pulte, the Trump-appointed head of the U.S. Federal Housing Finance Agency, who alleged that Cook committed mortgage fraud by describing separate properties in Michigan and Georgia as her primary residences on mortgage applications in 2021. Pulte asked the Justice Department to investigate, but no charges have been filed against Cook to date.
Cook and her supporters have strongly rejected the allegations, arguing that the accusations are merely a pretext for removing her and allowing Trump to install an ally on the Board who would be more aligned with his policy preferences. Cook has filed a lawsuit against Trump and the Federal Reserve, claiming that the president lacked the legal authority to remove her. She maintains that, even if the allegations were true, the conduct in question occurred before her Senate confirmation and should not be grounds for dismissal.
Bessent, for his part, emphasized that Cook has not denied the allegations themselves but is instead focusing her argument on the legality of her removal. “She hasn’t said she didn’t do it. She’s just saying the president can’t fire her. There’s a big difference,” Bessent told Reuters. He added, “I’ve been very surprised that the Fed has not done an independent review.” According to Bessent, Cook should be removed or step down if the allegations are substantiated, and he noted that the current structure of the Fed Board, with regional bank governors, means the president cannot simply “stack the board.”
The legal and political battle over Cook’s firing is just one piece of a much larger puzzle. With the sudden vacancy on the Board, Bessent has urged the Senate to act quickly to confirm Stephen Miran, chairman of the White House Council of Economic Advisers, as a temporary replacement for Adriana Kugler, who resigned on August 1. The urgency is palpable, as the Trump administration appears eager to assert greater influence over the central bank ahead of a pivotal period for U.S. monetary policy.
Looking forward, Bessent announced that the Trump administration will begin interviewing candidates for the position of Federal Reserve chair around Labor Day. The process, he told CNBC’s “Squawk Box” on September 2, will involve an initial pool of 11 candidates, including both current and former Fed officials as well as prominent figures from the private sector. “In terms of the interview process, we’ve announced 11 very strong candidates,” Bessent said. “I’m going to be meeting with them probably right before, right after Labor Day, and to start bringing down the list to present to President Trump.”
The list of contenders is a veritable who’s who of central banking and financial expertise. Among those under consideration are Fed Governor Philip Jefferson, Dallas Fed President Lorie Logan, former Fed governor Larry Lindsey, former St. Louis Fed President James Bullard, BlackRock Chief Investment Officer Rick Rieder, Jefferies Chief Market Strategist David Zervos, and former National Economic Council Deputy Director Mark Sumerlin. Bessent described the group as “an incredible group” and said he looks forward to meeting them “with a very open mind.”
The timing of the search is notable. While current Fed Chair Jerome Powell’s term is not set to expire until May 2026, the Trump administration is signaling it may nominate a successor sooner. Such a move would send a clear message that a shift toward a more dovish, pro-growth monetary policy is on the horizon. Trump and his advisers have made no secret of their desire for lower interest rates, which they argue would help stimulate the economy and reduce the costs associated with servicing the ballooning national debt.
Bessent has echoed these concerns, warning that the current level of interest rates is creating headwinds for the housing market and putting pressure on low-income households struggling with high credit card debt. “We’re seeing this big capex boom, part of it’s AI, part of it’s the tax bill. So capex is doing well, but households, homebuilding is struggling,” Bessent noted. He has called for a more aggressive approach from the Fed, advocating for a 50-basis-point interest rate cut—twice the size of the 25-basis-point reduction anticipated by markets. “If we keep constraining home building, then what kind of inflation does that create one or two years out? So a cut here could facilitate a boom or a pickup in home building, which will keep prices down one, two years down the road,” Bessent explained.
The debate over the Fed’s future is unfolding against a backdrop of broader economic uncertainty. While capital expenditures are reportedly booming, thanks in part to advances in artificial intelligence and recent tax legislation, the housing sector remains under strain. The outcome of the Trump administration’s efforts to remake the Fed’s leadership could have profound implications for everything from mortgage rates to the broader trajectory of the U.S. economy.
As the interviews for Fed chair candidates get underway and the legal fight over Lisa Cook’s firing plays out in the courts, observers across the political spectrum are watching closely. Some see the administration’s moves as a necessary corrective to what they view as the Fed’s missteps; others worry about the erosion of central bank independence and the precedent it might set. With so much at stake, the next few months promise to be a defining chapter in the ongoing story of America’s economic governance.