July 22, 2025 • 9 mins
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Fed Under Fire: Scott Bessent Calls Out the Cleanup Crew Economy
Description: Treasury Secretary Scott Bessent just tore into the Federal Reserve—and he’s right on target. Speaking at the Fed’s Capital Conference, Bessent slammed regulators for "reflex regulation" and playing hazmat cleanup after financial crises, rather than preventing them. He called for sweeping reforms, scrapping outdated capital requirements, ending dual regulation burdens, and halting the Fed’s drift into non-monetary missions. His blunt critique? The Fed is bloated with PhDs who’ve never worked in the private sector and now serve more as academic placeholders than economic stewards. This segment pulls no punches—exposing how central planning, regulatory bloat, and economic arrogance keep fueling America’s financial addiction. www.watchdogonwallstreet.com
Apple Podcasts: https://podcasts.apple.com/us/podcast/watchdog-on-wall-street-with-chris-markowski/id570687608
Spotify: https://open.spotify.com/show/2PtgPvJvqc2gkpGIkNMR5i
WATCH and SUBSCRIBE on:
https://www.youtube.com/@WatchdogOnWallstreet/featured
Fed Under Fire: Scott Bessent Calls Out the Cleanup Crew Economy
Description: Treasury Secretary Scott Bessent just tore into the Federal Reserve—and he’s right on target. Speaking at the Fed’s Capital Conference, Bessent slammed regulators for "reflex regulation" and playing hazmat cleanup after financial crises, rather than preventing them. He called for sweeping reforms, scrapping outdated capital requirements, ending dual regulation burdens, and halting the Fed’s drift into non-monetary missions. His blunt critique? The Fed is bloated with PhDs who’ve never worked in the private sector and now serve more as academic placeholders than economic stewards. This segment pulls no punches—exposing how central planning, regulatory bloat, and economic arrogance keep fueling America’s financial addiction. www.watchdogonwallstreet.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski secretis.
Speaker 2 (00:17):
A Scott Bessant takes on the FED and he's spot on.
I agree with him one hundred and ten percent. He
was speaking at the Federal Reserve Capital Conference, said that
there is need for deeper reforms in bank regulation, noting
that the system has been marked by regulation by reflex
Eh yeah, oh yeah. Again, it's like you know, the
(00:40):
the the old proverb, you know, saying there, you know,
got the horses and the cows already out of the barn,
and then they act upon that. But that always happens
with regulation in Washington, DC, whether it be with the
SEC or anything else. They're reactive. They're not proactive. And
he said, rather than preempting a crisis, regulators all too
often and react to them after the fact. They play
(01:03):
the role of a hazmat cleanup team instead of preventing
dangerous spillovers in the first place. Again, this is like
a watchdog on Wall Street. Echo Chamber I basically compare
the FED and you know, other regulators as well, like
in particularly sec as like CSI. You know again they're
coming in after the fact. Ah okay. Rather than reflexively
(01:28):
regulate anything that hits the headlines, we need to instead
be more explicit about our vision for the financial system. Again,
he basically talked about regulators reviewing outdated capital requirements that
place on necessary burdens on financial institutions and reduce bank lending. Yeah,
(01:51):
that's a part of it. But also paying these banks
on godly sums of money just to park money at
the FED is patently absurd. Twenty three July twenty three
three proposal that would subject banks to two sets of
capital requirements bank regulators should consider scrapping the dual requirement structure,
said it did not derive from a principled calibration methodology.
(02:14):
It was motivated simply to reverse engineer higher and higher
capital aggregates, and he said that the framework was at
odds with capital reform as a modernization project because it
would have preserved the antiquated capital requirements as the binding
floor for many and it actually most large banks. We
(02:35):
cannot give only large banks the benefit of these reduced
requirements as actually contemplated by the last administration. Spot On
Scott again, big believer in the fact that everyone should
have actually, you know, live by the same rules. We
don't have that in our society. Again he talks about
(03:01):
you know, J. Powell, and again the uncertainty, lack of
certainty over tariff driven inflation. He asked the FED to
conduct an exhaustive internal review of its non monetary policy operations,
noting that the Central Bank has been threatened by persistent
mandate creep into areas beyond its core mission. Hallelujah, Praise
(03:26):
the Lord. I agree the FED does regular reviews of
its monetary policy framework. I would urge the FED leadership
to similarly undertake, publish, and implement a comprehensive institutional review
across its entire mission to buttress its credibility. Again, when
he asked again he was asked about Trump wanted to
(03:47):
fire Powell. He says, we should think has the organization
succeeded in its mission? If this was the FAA and
we were having this many mistakes, will we go back
and look at why this has happened. And again they're
not wrong. Okay, you know, I for one, and I'm
(04:11):
not a fan of the way that Trump has handled
this by any stretch of the imagination. I'm going to
give you some of Trump's shots at Powell just over
the past six months. Mister too late, too late, should
resign immediately. Jerome Powell is a numbskull, one numb skull.
Jerome Powell costs the US six hundred billion. Powell's a knucklehead.
(04:32):
He's a stupid person, not a smart person. Powell's done
a lousy job. He's a fool who doesn't have a clue.
Jerome Powell's a real dummy, you know, truly one of
the dumbest and most destructive people in government and American disgrace,
A total and complete moron. Talking to Powell's like talking
to a chair. He should cut interest rates by three
(04:52):
percent and do it immediately. Why okay anyway, and not
not my cup of tea in regards to handling things.
But I just want to, you know, let the president. Now,
I know Bessett knows. It's not just j Powell. He
(05:13):
just doesn't. He's not king over there when it comes
to interest rates again. You know, you could take a
look at the FED and this is prior to Powell.
And these were all points that I've been making over
the years, and my criticism of the FED. FED. FED
(05:34):
basically was the gasoline to the fire when it came
to the whole financial crisis, interest rates being way too
low after nine eleven, not to mention the fact, you know,
getting in bed with some of this and allowing all
(05:55):
of the subprime nonsense to take place. I mean, Ben
BERNANKI yeah, so prime is contained? Yeah? Again, how do
you do guys? Not see we made fun of us
here on the program Silicon Valley Bank. It was plain
as day. But again, you know, you got connects and
(06:16):
the people that are doing banking there and FED and
people in government. You miss bear Stearns, you miss Lehman.
We didn't. I got a podcast in a radio show.
Yeah I got, you know, I got a financial firm,
and you know we're doing well, thank God and God
willing it continues. But we did. All of you PhDs
(06:40):
couldn't figure this out. Uh. And again that's a point
Scott Bess and again Watchdog on Wall Street, Echo Chamber
stuff that I've said here. He went on to talk
about all these PhDs over there. I don't know what
they do. This is like universal basic income for academic economists. Boo,
(07:05):
that was a spike on that.
Speaker 1 (07:07):
Whoa.
Speaker 2 (07:08):
But he's not wrong. He's not wrong. And this is
the point fire J. Powell. You still have all of
your PhDs over there, none of them, none of them
have actually worked in the private sector in their entire lives.
I mean, I don't know, four or five hundred economists,
(07:32):
what exactly do you do all day? I ever think
about that? What do you do all day long? You know,
we don't need a FED. We don't. There's there's just
no need for it. I've talked about this in the past.
(07:53):
You know, let the market decide what interest rates are
going to be. You don't have to anchor with this.
When we have issues within the economy. You know, we're
going to have to take our medicine. Let companies fail
the job of the FED. I mean we again, everybody
(08:15):
treats the FED like that. Again, it's like a financial
oxy conton for crying out loud, and we've got addicted
to the financial oxy cotton. Oh, American people can't take
the pain. Oh we gotta step in. We got to
tinker with the economy. Oh too hot, too cold. All
this bs I wrote a column about this economic metaphors
(08:37):
in nature. They treat the economy like it's an engine
that you can tinker with all the time. You know,
everything will be just fine if you guys just got
out of the way. Oh but wait, yeah, that's right,
I forgot. I forgot. You know that they help with
the ruse and help help keep our government afloat again.
(09:01):
We are thirty seven trillion dollars in debt watchdog on
Wall street dot Com
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski secretis.
Speaker 2 (00:17):
A Scott Bessant takes on the FED and he's spot on.
I agree with him one hundred and ten percent. He
was speaking at the Federal Reserve Capital Conference, said that
there is need for deeper reforms in bank regulation, noting
that the system has been marked by regulation by reflex
Eh yeah, oh yeah. Again, it's like you know, the
(00:40):
the the old proverb, you know, saying there, you know,
got the horses and the cows already out of the barn,
and then they act upon that. But that always happens
with regulation in Washington, DC, whether it be with the
SEC or anything else. They're reactive. They're not proactive. And
he said, rather than preempting a crisis, regulators all too
often and react to them after the fact. They play
(01:03):
the role of a hazmat cleanup team instead of preventing
dangerous spillovers in the first place. Again, this is like
a watchdog on Wall Street. Echo Chamber I basically compare
the FED and you know, other regulators as well, like
in particularly sec as like CSI. You know again they're
coming in after the fact. Ah okay. Rather than reflexively
(01:28):
regulate anything that hits the headlines, we need to instead
be more explicit about our vision for the financial system. Again,
he basically talked about regulators reviewing outdated capital requirements that
place on necessary burdens on financial institutions and reduce bank lending. Yeah,
(01:51):
that's a part of it. But also paying these banks
on godly sums of money just to park money at
the FED is patently absurd. Twenty three July twenty three
three proposal that would subject banks to two sets of
capital requirements bank regulators should consider scrapping the dual requirement structure,
said it did not derive from a principled calibration methodology.
(02:14):
It was motivated simply to reverse engineer higher and higher
capital aggregates, and he said that the framework was at
odds with capital reform as a modernization project because it
would have preserved the antiquated capital requirements as the binding
floor for many and it actually most large banks. We
(02:35):
cannot give only large banks the benefit of these reduced
requirements as actually contemplated by the last administration. Spot On
Scott again, big believer in the fact that everyone should
have actually, you know, live by the same rules. We
don't have that in our society. Again he talks about
(03:01):
you know, J. Powell, and again the uncertainty, lack of
certainty over tariff driven inflation. He asked the FED to
conduct an exhaustive internal review of its non monetary policy operations,
noting that the Central Bank has been threatened by persistent
mandate creep into areas beyond its core mission. Hallelujah, Praise
(03:26):
the Lord. I agree the FED does regular reviews of
its monetary policy framework. I would urge the FED leadership
to similarly undertake, publish, and implement a comprehensive institutional review
across its entire mission to buttress its credibility. Again, when
he asked again he was asked about Trump wanted to
(03:47):
fire Powell. He says, we should think has the organization
succeeded in its mission? If this was the FAA and
we were having this many mistakes, will we go back
and look at why this has happened. And again they're
not wrong. Okay, you know, I for one, and I'm
(04:11):
not a fan of the way that Trump has handled
this by any stretch of the imagination. I'm going to
give you some of Trump's shots at Powell just over
the past six months. Mister too late, too late, should
resign immediately. Jerome Powell is a numbskull, one numb skull.
Jerome Powell costs the US six hundred billion. Powell's a knucklehead.
(04:32):
He's a stupid person, not a smart person. Powell's done
a lousy job. He's a fool who doesn't have a clue.
Jerome Powell's a real dummy, you know, truly one of
the dumbest and most destructive people in government and American disgrace,
A total and complete moron. Talking to Powell's like talking
to a chair. He should cut interest rates by three
(04:52):
percent and do it immediately. Why okay anyway, and not
not my cup of tea in regards to handling things.
But I just want to, you know, let the president. Now,
I know Bessett knows. It's not just j Powell. He
(05:13):
just doesn't. He's not king over there when it comes
to interest rates again. You know, you could take a
look at the FED and this is prior to Powell.
And these were all points that I've been making over
the years, and my criticism of the FED. FED. FED
(05:34):
basically was the gasoline to the fire when it came
to the whole financial crisis, interest rates being way too
low after nine eleven, not to mention the fact, you know,
getting in bed with some of this and allowing all
(05:55):
of the subprime nonsense to take place. I mean, Ben
BERNANKI yeah, so prime is contained? Yeah? Again, how do
you do guys? Not see we made fun of us
here on the program Silicon Valley Bank. It was plain
as day. But again, you know, you got connects and
(06:16):
the people that are doing banking there and FED and
people in government. You miss bear Stearns, you miss Lehman.
We didn't. I got a podcast in a radio show.
Yeah I got, you know, I got a financial firm,
and you know we're doing well, thank God and God
willing it continues. But we did. All of you PhDs
(06:40):
couldn't figure this out. Uh. And again that's a point
Scott Bess and again Watchdog on Wall Street, Echo Chamber
stuff that I've said here. He went on to talk
about all these PhDs over there. I don't know what
they do. This is like universal basic income for academic economists. Boo,
(07:05):
that was a spike on that.
Speaker 1 (07:07):
Whoa.
Speaker 2 (07:08):
But he's not wrong. He's not wrong. And this is
the point fire J. Powell. You still have all of
your PhDs over there, none of them, none of them
have actually worked in the private sector in their entire lives.
I mean, I don't know, four or five hundred economists,
(07:32):
what exactly do you do all day? I ever think
about that? What do you do all day long? You know,
we don't need a FED. We don't. There's there's just
no need for it. I've talked about this in the past.
(07:53):
You know, let the market decide what interest rates are
going to be. You don't have to anchor with this.
When we have issues within the economy. You know, we're
going to have to take our medicine. Let companies fail
the job of the FED. I mean we again, everybody
(08:15):
treats the FED like that. Again, it's like a financial
oxy conton for crying out loud, and we've got addicted
to the financial oxy cotton. Oh, American people can't take
the pain. Oh we gotta step in. We got to
tinker with the economy. Oh too hot, too cold. All
this bs I wrote a column about this economic metaphors
(08:37):
in nature. They treat the economy like it's an engine
that you can tinker with all the time. You know,
everything will be just fine if you guys just got
out of the way. Oh but wait, yeah, that's right,
I forgot. I forgot. You know that they help with
the ruse and help help keep our government afloat again.
(09:01):
We are thirty seven trillion dollars in debt watchdog on
Wall street dot Com
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