U.S. Treasury Secretary Scott Bessent's Latest Developments: Promoting Federal Reserve Reform, Launching Large-Scale Investigation into Border Money Laundering
U.S. Treasury Secretary Scott Bessent's recent activities focus on Federal Reserve reform, combating illegal capital flows, and adjusting monetary policy.
Bessent confirmed on December 24 that the government is interviewing candidates for the Federal Reserve chair, seeking leaders who can "shrink the size of the Federal Reserve and end permanent quantitative easing." He criticized the Federal Reserve as an "engine of inequality" and suggested that once inflation sustainably returns to 2%, the 2% target should be changed to a range (e.g., 1%-3%) to increase flexibility. This statement was made during an appearance on the All-In Podcast, drawing market attention.
On December 22-23, Bessent announced the launch of a data-driven federal investigation targeting over 100 money services businesses (MSBs) at the U.S.-Mexico border, suspected of being involved in money laundering related to drug trafficking organizations. This operation utilizes advanced technology to track the flow of funds and has issued investigation notices, IRS referrals, and compliance letters. Bessent emphasized that this initiative aims to combat drug trafficking, human trafficking, and other drug inflows, responding to the Trump administration's priority on economic security.
Additionally, Bessent completed the divestiture of $12.4 million in soybean farm assets to avoid conflicts of interest; his strong political style (e.g., public partisan activities) breaks from tradition and has earned praise from Trump, but has raised some concerns.
Bessent is also pushing for reforms at the Financial Stability Oversight Council (FSOC) to reduce burdensome regulations and prioritize economic growth.
Summary: Bessent is aggressively advancing the streamlining of the Federal Reserve, loosening regulations, and combating border money laundering, showcasing a professional market approach and a combative political style. U.S. fiscal monetary policy may face significant changes by 2026.
