U.S. Treasury Secretary Besant Defers on Presidential Authority to Dismiss Fed Officials

U.S. Treasury Secretary Besant declined to state whether President Trump has the authority to dismiss Federal Reserve governors due to policy disagreements. When questioned on Wednesday about whether the President possesses the constitutional authority to remove a Federal Reserve governor solely over policy differences, Besant stated, "I am not a lawyer, and I do not have an opinion." Democratic Representative Ritchie Torres of New York posed this question to Besant during a hearing before the House Financial Services Committee. Trump is attempting to dismiss Federal Reserve Governor Lisa Cook based on "for cause" grounds, citing alleged involvement in mortgage fraud, a case that has now been escalated to the U.S. Supreme Court. Concurrently, the U.S. Department of Justice is investigating testimony given by Fed Chair Jerome Powell concerning an office building renovation project. Powell stated last month that this action "should be viewed within the broader context of government threats and sustained pressure." Besant was also asked whether he believes the "unitary executive theory" applies to the Federal Reserve. This is a school of constitutional interpretation that argues the Founding Fathers intended for the President to hold broad powers over the executive branch. "We have to wait and see what the Supreme Court says," the Treasury Secretary responded, refusing to offer a personal opinion. When pressed on the administration's official stance, he indicated, "There are differing views within the administration." Regarding the Federal Reserve's Credibility When asked whether he considers the Federal Reserve part of the executive or legislative branch, Besant replied, "I consider it an independent agency." According to Section 10 of the 1913 Federal Reserve Act, which governs the central bank, members of the Federal Reserve Board can be removed for "cause," but the law does not explicitly define what constitutes such cause. During the hearing, Besant reiterated his criticism of the Federal Reserve, asserting that it lost public trust during the period of soaring inflation following the pandemic. He also mentioned cost overruns associated with the Fed's office renovation project but did not elaborate further. He stated, "I do believe the Federal Reserve must maintain credibility, and be like Caesar's wife—above reproach."