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Treasury Secretary Bessent says
"unlike the Federal Reserve I can't print magic money."
The Context of the Comment
Bessent was testifying about the Financial Stability Oversight Council (FSOC) and the administration's broader economic goals. His statement was part of a larger critique of the Federal Reserve's independence and funding structure:
Funding Friction: Unlike most government agencies, the Fed isn't funded by Congressional appropriations; it generates its own revenue from interest on securities and fees. Bessent used the term "magic money" to describe this self-funding mechanism, arguing it leads to a lack of accountability.
Inflation Blame: He explicitly blamed the Fed for the "greatest inflation in 49 years," stating that the central bank lost the public's trust by allowing prices to ravage working-class families.
The "Shadow" Transition: The comment comes at a high-stakes moment for the Fed. President Trump has nominated Kevin Warsh to succeed Jerome Powell as Chair, and the administration has even opened a criminal investigation into Powell’s handling of a $2.5 billion headquarters renovation.
