Treasury Secretary Scott Bessent has found a scapegoat for every one of America’s economic shortcomings in the past two decades. In a pair of essays — one published in The International Economy and an abridged version in The Wall Street Journal — he blames the Fed for growing inequality; too much inflation in 2021 and 2022; the 2023 bank failures; the fiscal recklessness of the political class; and the ongoing housing affordability crisis, among other things. It’s quite a list!

As I see it, Bessent’s fundamental claim — encapsulated in the title of his piece, "The Fed’s ‘Gain of Function’ Monetary Policy" (in the version in The International Economy, the title is ever so slightly different: "The Fed’s New ‘Gain-of-Function’ Monetary Policy") — is that the Fed has mutated into some sort of

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