Treasury Secretary Scott Bessent excoriated the Financial Times on Thursday, calling the British newspaper “tabloid trash” and accusing its journalists of fabricating a story claiming he had praised the Bank of England’s governance structure as a model for tightening oversight of the Federal Reserve.
The FT reported Wednesday that Bessent had discussed adopting elements of the BoE’s relationship with the UK Treasury — including a system of formal letter-writing between the central bank governor and the chancellor of the exchequer — as a template for restructuring the Fed’s relationship with the U.S. government. The story attributed the claim to unnamed “financial industry executives familiar with the matter.”
Bessent responded on social media with a blistering denial, calling the story “explicitly false” and “100 per cent fake news.” He said he had provided a “direct, on-the-record denial” to FT reporters before publication and accused them of running the story anyway on the strength of anonymous sources.
“These pathetic journalists have clearly fabricated a story,” Bessent wrote, adding that the FT’s reporters were “shocking in their meretriciousness, lack of standards, and general intellectual libertinism.” He called it “the worst tradition of Fleet Street to manufacture news rather than report on it.”
In on-the-record quotes provided to the newspaper before publication, Bessent praised the BoE’s approach to crisis-era asset purchases — not its governance framework. He told the FT it was “admirable how the Bank of England conducts large-scale asset purchases during financial crises and other times of systemic stress, and how they stop their interventions after smooth market functioning has been restored.”
But on the specific question of the BoE’s letter-writing system — the mechanism at the heart of the story’s thesis — Bessent told the FT directly that it had “proven to be both ineffective and bureaucratic.” That quote appeared well below the headline.
The story’s central claim — that Bessent had expressed “admiration for the reforms introduced by the UK government in 1997” and had discussed restructuring the Treasury-Fed relationship along BoE lines — rested entirely on anonymous sourcing from “financial industry executives” and “some market participants who spoke with Bessent.”
Two Very Different Systems
The institutional gap between the BoE and the Fed is substantial, and the distinction matters for understanding what the FT alleged.
Under the framework established by the Bank of England Act 1998, the UK’s Chancellor of the Exchequer sets the BoE’s inflation target — currently 2 percent on the consumer prices index. The BoE has “operational independence” to pursue that target, but it is what economists call “goal-dependent”: the government, not the central bank, defines the objective.
When inflation deviates by more than one percentage point from target in either direction, the BoE Governor is required to write a public letter to the Chancellor explaining why the miss occurred and what the bank intends to do about it. The Chancellor writes back. These letters have been flowing on a quarterly basis through 2025 as UK inflation remained elevated. The BoE also operates its quantitative easing program — the Asset Purchase Facility — under a formal indemnity from the Treasury, giving the government a direct financial stake in the central bank’s balance sheet operations.
The Federal Reserve operates under a fundamentally different architecture. Congress sets the Fed’s broad statutory mandate — maximum employment, stable prices, and moderate long-term interest rates — but the Fed itself chose its own 2 percent inflation target under former Chairman Ben Bernanke in 2012. The Fed is both “goal-independent” and “instrument-independent.”
There is no letter-writing mechanism. The Fed reports to Congress — not to the Treasury — through semiannual Monetary Policy Reports and testimony by the chairman, a process rooted in the Humphrey-Hawkins Full Employment Act of 1978. The Treasury Secretary and Fed Chair meet informally, typically over a weekly breakfast. The foundational document governing their relationship is the 1951 Treasury-Fed Accord, which was designed specifically to end the Fed’s subordination to Treasury borrowing needs during and after World War II.
Unlike the BoE, the Fed funds itself from earnings on its securities portfolio and its ability to create money rather than through congressional appropriations, and it operates QE without any Treasury indemnity.
Bessent’s Published Views
Bessent pointed to a 6,000-word essay he published in The International Economy magazine in early 2025 as the definitive record of his views on Fed reform. The piece, titled “The Fed’s New ‘Gain-of-Function’ Monetary Policy,” argued that the Fed’s adoption of quantitative easing had produced severe distributional consequences, undermined the central bank’s credibility, and threatened its independence.
The essay called for scaling back unconventional monetary tools, narrowing the Fed’s mandate, and conducting “an honest, independent, and nonpartisan review” of the institution. It proposed shifting day-to-day bank supervision back to the FDIC and the Office of the Comptroller of the Currency.
The only reference to the Bank of England in the entire piece was a quote from former BoE Governor Mervyn King criticizing the Fed’s reliance on inflation expectations as a policy anchor — what King called “the King Canute theory of inflation.” There was no discussion of the BoE’s governance structure, its relationship with the Chancellor, or the letter-writing system.
“Over the past 10 years, I have written more than 20,000 words opining on the Federal Reserve decisions, personnel, structure, and modifications,” Bessent wrote in his response. “Nowhere have I ever mentioned this ridiculous notion.”
The Warsh Factor
The FT’s story also referenced Kevin Warsh, President Trump’s nominee to succeed Jay Powell as Fed chairman when Powell’s term expires in May. The story reported that Warsh had “signalled that he would be interested in potentially adopting the BoE’s letter-writing process during times of crisis,” citing his 2023 testimony before the House of Lords Economic Affairs Committee.
Warsh does have deep familiarity with the BoE. In 2014, he conducted an independent review of the BoE’s Monetary Policy Committee transparency practices at the invitation of Governor Mark Carney. That review focused on meeting procedures, the timing of minutes releases, and the quality of policy deliberations — not on the Chancellor-Governor accountability framework.
In his 2023 House of Lords testimony, Warsh praised the BoE’s operational independence as “essential” and called it “a necessary prerequisite for the sound conduct of monetary policy.” He also emphasized that central bank independence requires the institution to “act independently without favour to any one side.”
The FT reported that Warsh “views BoE-type letters in times of crisis as a way to iron out and reinforce changes that both he and Bessent have publicly stated they want to make to the relationship between the Treasury and Fed.” This claim was attributed to “people familiar with his thinking.” Warsh declined to comment.
The story landed amid escalating tensions between the Trump administration and the Federal Reserve. The president has publicly called Powell a “moron” for declining to cut interest rates, and the Justice Department has opened a criminal probe into Powell related to renovations at the Fed’s headquarters.
Bessent accused the FT of manufacturing the story to advance “a maliciously false narrative of dysfunction and divisiveness” and said the newspaper had “brought irredeemable shame to their parent organization, Nikkei Inc.”
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