U.S. Treasury Secretary discusses the Fed: the independence of monetary policy is under threat, and the new chairman needs to have a forward-thinking mindset.

According to a report by Nikkei News on August 11, in response to questions about the qualities the next Fed chair should possess, U.S. Treasury Secretary Basent stated, “The new chair must earn the trust of the markets and possess the ability to analyze complex economic data. The FOMC has 12 voting members, so the chair needs to coordinate various parties and facilitate consensus. I think it is more important that this leader should have forward-thinking rather than being confined to historical data. What worries me currently is that the independence of monetary policy is being eroded. This independence is crucial for the smooth operation of the economy and the management of inflation expectations. The functions of the Fed are expanding into other areas, which threatens this fundamental principle. Therefore, the next chair must be able to re-examine the positioning of the entire institution.” Regarding Trump’s call for the Fed to quickly cut interest rates, Basent stated, “President Trump will express his position, and Senator Elizabeth Warren will also voice her opinion. But the final decision-making power rests with the independent Fed.”