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Bessent Wants a Fed Chair Who'll Shrink the Central Bank and Kill Perpetual QE

MarketDash Editorial Team
1 day ago
Treasury Secretary Scott Bessent is interviewing candidates for Fed Chair, and he's made one thing clear: the next leader needs to shrink the institution and end the era of endless quantitative easing that he calls the "engine of inequality."

Treasury Secretary Scott Bessent just said the quiet part out loud: the administration is hunting for a Federal Reserve Chair who will actively shrink the central bank and put an end to what he calls "perpetual quantitative easing." And he's already deep into interviews with potential candidates.

Calling Out the "Engine of Inequality"

Speaking on the All-In Podcast during a year-end economic review, Bessent didn't mince words about the Fed's role over the past 15 years. He described the central bank's massive asset purchase programs—those trillion-dollar bond-buying sprees that started during the 2008 financial crisis—as "gain of function" experiments that need to be rolled back.

Here's the core of his argument: the Federal Reserve has become "the engine of inequality." While Bessent acknowledged that creating equality isn't the Fed's job, he argued forcefully that it shouldn't be actively making the wealth gap worse.

"We ended up with this two-tier economy where either you were an asset holder, or you weren't," Bessent explained. By keeping interest rates artificially suppressed and purchasing trillions in assets, the Fed essentially inflated the portfolios of wealthy investors while Main Street got left behind. If you owned stocks or real estate, you made out great. If you didn't, not so much.

Bessent also took aim at what he called "modern monetary practice"—basically the Fed monetizing government debt. His message was clear: the next Fed Chair needs to treat quantitative easing as an emergency-only tool, not business as usual.

Time to Downsize the Institution

Beyond changing monetary policy, Bessent wants to see structural changes at the Fed itself. He pointed out something that doesn't get talked about enough: the Federal Reserve operates without the budgetary oversight that applies to other government agencies. It literally "prints its own money" and faces no fiscal discipline.

"Everyone wants to see a smaller footprint and more predictability," Bessent said about the candidates being considered.

The vision here is a Fed that operates quietly in the background, focused on its core mandate, rather than having markets obsess over every syllable uttered by the Chair. Less drama, more stability.

Who's in the Running?

Bessent confirmed he's conducted extensive interviews with the leading contenders: Kevin Warsh, Kevin Hassett, and current Fed Governor Chris Waller. The shortlist consists of people who share the administration's preference for what Bessent calls a "traditional" Fed—one that focuses on price stability rather than trying to micromanage the entire economy.

"I understand probably better than just about anybody… what needs to be done," Bessent said, suggesting that a nomination could come soon as the administration gears up for 2026.

Markets Holding Strong Despite the Fed Debate

While all this Fed drama unfolds, the stock market has been remarkably resilient this year. Despite various federal and economic challenges, all three major U.S. indices posted solid gains throughout 2025.

The S&P 500 climbed 17.74% year-to-date, while the Nasdaq Composite surged 22.20% and the Dow Jones advanced 14.27%.

The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq 100 indices respectively, both closed higher on Tuesday. SPY gained 0.46% to reach $687.96, while QQQ advanced 0.47% to $622.11, according to market data.

Futures for the Dow Jones, S&P 500, and Nasdaq 100 indices were trading lower on Wednesday.

The fundamental question Bessent is raising goes beyond just who leads the Fed—it's about what kind of institution the Federal Reserve should be. Should it continue the activist approach of the post-crisis era, or return to a more limited, traditional role? The next Chair will have to answer that question with more than just words.

Back to Stock Market News

Bessent Wants a Fed Chair Who'll Shrink the Central Bank and Kill Perpetual QE

MarketDash Editorial Team
1 day ago
Treasury Secretary Scott Bessent is interviewing candidates for Fed Chair, and he's made one thing clear: the next leader needs to shrink the institution and end the era of endless quantitative easing that he calls the "engine of inequality."

Treasury Secretary Scott Bessent just said the quiet part out loud: the administration is hunting for a Federal Reserve Chair who will actively shrink the central bank and put an end to what he calls "perpetual quantitative easing." And he's already deep into interviews with potential candidates.

Calling Out the "Engine of Inequality"

Speaking on the All-In Podcast during a year-end economic review, Bessent didn't mince words about the Fed's role over the past 15 years. He described the central bank's massive asset purchase programs—those trillion-dollar bond-buying sprees that started during the 2008 financial crisis—as "gain of function" experiments that need to be rolled back.

Here's the core of his argument: the Federal Reserve has become "the engine of inequality." While Bessent acknowledged that creating equality isn't the Fed's job, he argued forcefully that it shouldn't be actively making the wealth gap worse.

"We ended up with this two-tier economy where either you were an asset holder, or you weren't," Bessent explained. By keeping interest rates artificially suppressed and purchasing trillions in assets, the Fed essentially inflated the portfolios of wealthy investors while Main Street got left behind. If you owned stocks or real estate, you made out great. If you didn't, not so much.

Bessent also took aim at what he called "modern monetary practice"—basically the Fed monetizing government debt. His message was clear: the next Fed Chair needs to treat quantitative easing as an emergency-only tool, not business as usual.

Time to Downsize the Institution

Beyond changing monetary policy, Bessent wants to see structural changes at the Fed itself. He pointed out something that doesn't get talked about enough: the Federal Reserve operates without the budgetary oversight that applies to other government agencies. It literally "prints its own money" and faces no fiscal discipline.

"Everyone wants to see a smaller footprint and more predictability," Bessent said about the candidates being considered.

The vision here is a Fed that operates quietly in the background, focused on its core mandate, rather than having markets obsess over every syllable uttered by the Chair. Less drama, more stability.

Who's in the Running?

Bessent confirmed he's conducted extensive interviews with the leading contenders: Kevin Warsh, Kevin Hassett, and current Fed Governor Chris Waller. The shortlist consists of people who share the administration's preference for what Bessent calls a "traditional" Fed—one that focuses on price stability rather than trying to micromanage the entire economy.

"I understand probably better than just about anybody… what needs to be done," Bessent said, suggesting that a nomination could come soon as the administration gears up for 2026.

Markets Holding Strong Despite the Fed Debate

While all this Fed drama unfolds, the stock market has been remarkably resilient this year. Despite various federal and economic challenges, all three major U.S. indices posted solid gains throughout 2025.

The S&P 500 climbed 17.74% year-to-date, while the Nasdaq Composite surged 22.20% and the Dow Jones advanced 14.27%.

The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq 100 indices respectively, both closed higher on Tuesday. SPY gained 0.46% to reach $687.96, while QQQ advanced 0.47% to $622.11, according to market data.

Futures for the Dow Jones, S&P 500, and Nasdaq 100 indices were trading lower on Wednesday.

The fundamental question Bessent is raising goes beyond just who leads the Fed—it's about what kind of institution the Federal Reserve should be. Should it continue the activist approach of the post-crisis era, or return to a more limited, traditional role? The next Chair will have to answer that question with more than just words.