In a signed article, Treasury Secretary Benson emphasizes that the Federal Reserve’s independence relies on public trust. He argues the central bank must recommit to maintaining the confidence of the American people. Notably, Benson introduces “moderate long-term interest rates” as a new core mandate, placing it alongside maximum employment and price stability as one of the Fed’s three key statutory duties. He also insists that unconventional policies like quantitative easing should only be used during “true emergencies” and in coordination with other federal agencies.

A Public Critique of the Fed’s Direction

Secretary Benson has openly urged the Federal Reserve—the world’s most influential central bank—to refocus on its statutory duties and serve the trust of the American people, not just asset owners.

In his op-ed published in the Wall Street Journal, Benson sharply criticized the Fed’s post-financial crisis policies as a risky “gain-of-function” experiment. He warned that overuse of unconventional tools, mission creep, and bureaucratic bloat are endangering the central bank’s independence. He made it clear that policies like QE must be reserved for genuine crises and implemented in coordination with other branches of government.

The Three Core Mandates

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Benson stressed that the Fed’s independence stems from public trust. To protect its future and ensure U.S. economic stability, the Fed must rebuild its credibility by focusing on its statutory missions: maximum employment, stable prices, and moderate long-term interest rates.

This is the first time Benson has explicitly grouped “moderate long-term interest rates” with the Fed’s traditional dual mandate. Market observers see this as an unusual signal, suggesting that the administration may prioritize lowering long-term borrowing costs—especially those tied to mortgage rates.

Criticism of Unconventional Policies

Benson strongly criticized the Fed’s unconventional monetary policies since the 2008 crisis. He compared them to a dangerous experiment with unpredictable outcomes that worsened wealth inequality.

These policies, he argued, created an implicit safety net for asset owners, concentrating wealth among those already well-off. Large corporations thrived by locking in cheap debt, while small businesses suffered under rising rates. Homeowners benefited from fixed-rate mortgages and rising property values, while younger and lower-income families faced unaffordable housing and higher inflation.

Benson cited analyst Karen Petrou, who wrote that “unprecedented inequality clearly shows the wealth effect works too well for the rich, while accelerating

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economic distress for everyone else.” He concluded that the Fed’s policies not only failed to control inflation but also widened social and generational divides.

Blurred Lines and Threats to Independence

Benson expressed concern that the Fed’s expanding role has blurred the line between monetary and fiscal policy, undermining its independence.

By using its balance sheet to direct capital to specific sectors, the Fed has entered territory that should be left to markets and elected officials. Its involvement in debt management also creates the perception that monetary policy is being used to accommodate fiscal needs. This dynamic, Benson warned, encourages fiscal irresponsibility in Washington.

He also pointed to regulatory overreach. The Dodd-Frank Act greatly expanded the Fed’s supervisory role, but the 2023 collapse of Silicon Valley Bank revealed the risks of combining regulation with monetary policy. Benson recommended returning bank supervision to the FDIC and OCC, allowing the Fed to focus on monetary policy and macro oversight.

A Roadmap for Reform

Benson called for the Fed to reduce its market distortions, return to its core mandates, and rebuild public trust.

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He urged the Fed to recommit to its three core duties and undergo an independent, non-partisan review of its policies, communications, staffing, and research. Most importantly, he insisted that tools like QE should only be deployed during true emergencies and in coordination with other government branches.

Market Implications

Such direct public criticism of the Fed by a Treasury Secretary is rare. Market analysts are interpreting Benson’s comments as a sign of growing executive influence over monetary policy.

The new emphasis on “moderate long-term interest rates” aligns with the administration’s focus on reducing mortgage rates. Some analysts believe this could pave the way for financial repression policies—such as yield curve control or renewed QE—which would likely weaken the U.S. dollar. In such a scenario, assets like gold, silver, copper, and Chinese equities could benefit.

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