Sen. Rick Scott Calls on Fed Chair Powell to Continue Paying Down Balance Sheet: ‘Do Not Add to Your Growing List of Failures’

WASHINGTON, D.C. - Yesterday, ahead of the Federal Reserve's Federal Open Market Committee meeting, Senator Rick Scott sent a letter to Federal Reserve Chair Jay Powell urging him not to halt the Fed's ongoing balance sheet reduction. Senator Scott highlighted that under Powell's leadership, the balance sheet has ballooned in size and that the Fed has failed to meet any of its reduction targets. Senator Scott continues to call for transparency and accountability from the Federal Reserve and for the next chair to commit to fixing the Fed, urging Powell not to add to his enormous list of failures that continue to harm American families.

Read the full letter HERE or below:

Dear Chairman Powell:

Earlier this month, on October 14, you indicated that the Federal Reserve (Fed) may stop the reduction of its balance sheet, known as quantitative tightening (QT) soon. This is deeply concerning, and I urge you to reconsider.

When we first met over six years ago in 2019, the Fed's balance sheet was $3.8 trillion. Under your tenure as chair, the Fed's balance sheet ballooned to nearly $9 trillion, fueled by 4.7 trillion in security purchases you oversaw between March 2020 and March 2022. It now sits at a whopping $6.6 trillion after you have failed to reach any single self-established benchmark to pay it down.

The Federal Reserve's reckless and unprecedented securities buying spree, coupled with the Fed's slow and insufficient pace of balance sheet run-off, has resulted in the highest inflation in four decades, making it harder for American families to put roofs over their heads and food on their tables. If the Federal Reserve ends quantitative tightening efforts now, the American people will continue to suffer from your failures.

As senator, I have worked to implement accountability at the Federal Reserve and expressed concerns about your complete mismanagement of the Fed's balance sheet and monetary policy. The Fed can fulfill its mission of providing stability for the American people and reducing its balance sheet, but that requires changing the status quo. For example, the Fed is currently operating with over $243 billion in losses, with taxpayers on the hook, but this could be significantly reduced by ending the Fed's Interest on Reserve Balances program, which pays interest to banks on reserves and wasted $186 billion in 2024 alone.

As your tenure as Fed chair ends, I simply ask that you do not add to your growing list of failures by ending efforts to pay down the balance sheet. This will prolong the American people's suffering and make it harder for your successor as chair to fix the Federal Reserve and restore Americans' trust in the central bank.

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