Bessent Calls For ‘Fundamental Reset’ Of Financial Regulations – ‘What Do All Those PhDs Do?’
Treasury Secretary Scott Bessent on Monday called for a “fundamental reset” of financial regulations to ensure they are aligned with the nation’s domestic and international priorities.
Speaking at the Federal Reserve Capital Conference, Bessent said there is a need for “deeper reforms” in bank regulation, noting that the system has been marked by “regulation by reflex,” where bank regulators tend to introduce new rules after issues have already occurred.
“Rather than preempting crises, regulators all too often react to them after the fact. They play the role of a hazmat cleanup team instead of preventing dangerous spillovers in the first place,” Bessent said.
“Rather than reflexively regulate anything that hits the headlines, we need to instead be more explicit about our vision for the financial system,” he added.
As Aldgra Fredly reports for The Epoch Times, Bessent said the Treasury will reinforce reform efforts by working to “break through policy inertia, settle turf battles, drive consensus, and motivate action to ensure no single regulator holds up reform.”
He suggested that bank regulators should review outdated capital requirements that place “unnecessary burdens on financial institutions” and reduce bank lending.
Bessent specifically referenced a July 2023 proposal that would subject banks to two sets of capital requirements. He believes that bank regulators should consider scrapping the dual-requirement structure.
“This dual-requirement structure did not derive from a principled calibration methodology. It was motivated simply to reverse-engineer higher and higher capital aggregates,” he said.
Bessent noted 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, perhaps most, large banks.”
He also suggested allowing any bank that is not subject to modernized capital requirements the choice to opt in, extending the benefits of reduced capital requirements to smaller banks.
“We cannot give only large banks the benefit of these reduced requirements, as actually contemplated by the last administration,” he said.
The Trump administration has been at loggerheads with the Federal Reserve over interest rate cuts. President Donald Trump wanted the Fed to lower interest rates to make borrowing less expensive, but the central bank has kept its benchmark policy rate unchanged at 4.25 to 4.50 percent.
Federal Reserve Chair Jerome Powell has said the lack of certainty over tariff-driven inflation has made the Fed delay lowering interest rates for now, since price impacts are expected to manifest weeks or months after tariffs settle into the markets.
In a social media post on Monday, Bessent called on 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.”
“The Fed does regular reviews of its monetary policy framework. I would urge Fed leadership to similarly undertake, publish and implement a comprehensive institutional review across its entire mission to buttress its credibility,” he stated on X, citing excerpts from his interview with CNBC that aired on July 21.
When pressed on whether he advised Trump not to try to fire Jerome Powell Bessent kept mum, but he did suggest that the Federal Reserve as an institution needs to be examined.
“We should think has the organization succeeded in its mission? If this was the FAA and we were having this many mistakes, we would go back and look at why has this happened.”
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Bessent’s criticism of the Fed’s ability to fulfill its basic mission of providing stability to financial markets, regulating the banking system and conducting monetary policy might suggest that Trump could bypass questions of whether he has the legal authority to fire Powell and ‘do an Andrew Jackson’ by abolishing the central bank altogether.
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Trade Deficit Narrows As Imports Plunge and Exports Rise
The U.S. trade deficit in goods contracted far more than expected in April, falling from March’s record high of $162.3 billion to $87.6 billion, according to the Commerce Department’s initial estimate released Friday.
Economists had forecast a $143 billion deficit.
Imports of goods for April were $276.1 billion, $68.4 billion less than March imports. Goods exports rose $6.3 billion to $188.5 billion.
Many businesses and some consumers appear to have loaded up on imports in March, ahead of the Liberation Day tariff announcement. This so-called tariff front-running led to a surge in imports, pulling forward purchases that would have otherwise been made later in the year.
The April decline is likely an extension of this, with purchases of imports falling because household and business inventories were already stocked. In addition, some imports faced higher tariffs in April, likely discouraging purchases.
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A Pollution Tariff Would Close China’s Trade Loopholes
Robie Le Chat May 10, 2025 8 min read
A pollution tariff would hold China accountable for environmental abuses, block tariff evasion, protect U.S. interests, and position America as a global trade leader
The “America First” trade agenda has consistently sought to restore fairness to America’s economic relationships, particularly with China, a nation notorious for exploiting uneven playing fields. Last month, President Trump was right to call out China for creating “filthy pollution havens” that encourage cheap and dirty production to undercut the American worker. China’s lack of environmental enforcement acts as a hidden subsidy for their manufacturers—one of the many devastated non-market barriers that the President has rightly cited as crushing working class Americans.
A pollution tariff – a fee on imports from countries with weak environmental standards – would offer the President a potent tool to counter China and hold them accountable. By targeting China’s environmental abuse, this policy thwarts Beijing’s ability to cheat, blocks their tariff evasion tactics, protects U.S. national security, and positions the U.S. as a global trade leader, rallying allies and isolating China.
China’s history of exploiting trade loopholes demands a policy that’s resistant to manipulation. The U.S. possesses a wealth of reliable, high-resolution data on China’s environmental performance, encompassing energy consumption, urban air quality, water contamination, and other critical pollution metrics. Advanced satellite imagery, third party environmental reports, and on-the-ground monitoring provide an unfiltered, real-time view of whether China is genuinely aligning with its promises or merely paying lip service while cutting corners. This transparency makes cheating nearly impossible. Unlike traditional trade agreements, which often rely on ambiguous enforcement mechanisms, a pollution tariff is anchored to verifiable, data-driven outcomes. If China claims to enforce laws on air pollution and industrial waste and require its industry to play by the same rules as U.S. manufacturers, we can rigorously cross-check those assertions against concrete evidence, ensuring tariff relief is granted only for authentic, measurable actions.
The ability to monitor China’s environmental practices has significant national security implications as well. China’s lax environmental standards often go hand-in-hand with its opaque industrial practices, which can mask activities that threaten U.S. interests, such as the production of dual-use technologies. By leveraging cutting-edge surveillance tools, such as satellite data and international monitoring networks, a pollution tariff not only holds China accountable for environmental negligence but also enhances our visibility into their industrial ecosystem. This transparency would reduce the risk of strategic surprises and ensure that our trade policies align with broader geopolitical objectives. The tariffs would fit seamlessly with President Trump’s demand for accountability in trade while safeguarding America’s economic and security interests against a rival known for exploiting every available advantage.
The pollution tariff’s strength lies not only in its enforceability but also in its ability to neutralize China’s go-to evasion tactics. China has long dodged U.S. tariffs by rerouting manufacturing through third countries like Vietnam, Malaysia, or Mexico. A pollution tariff shuts this door. Most nations China uses to circumvent tariffs lag far behind U.S. environmental standards, with weak regulations and minimal enforcement. By applying the tariff to goods from any country failing to meet America’s environmental benchmarks, we render these workarounds ineffective. This ensures China can’t exploit weaker environmental regimes to undercut American businesses, reinforcing Trump’s commitment to closing trade loopholes.
The broader implications of a pollution tariff extend far beyond U.S.-China trade, presenting a golden opportunity to cement American leadership on the global stage. Allies like Canada, Japan, and the European Union, which already champion rigorous environmental standards, will see it as a model for actions of their own. By taking the lead, the U.S. could compel these allies to adopt similar tariffs, creating a coordinated international effort to hold polluters like China accountable. Such a move would amplify the economic and diplomatic costs for China’s persistent environmental negligence, isolating it within the global trade system and exposing its reliance on cheap and dirty manufacturing.
This ripple effect would reshape global trade dynamics in America’s favor. Global demand for clean, American-made products would increase, taking back market share from China. The tariff would also set a new global benchmark for trade, redefining fairness to reward America’s strengths as a leader in cleaner manufacturing and innovation. This strategic alignment enhances U.S. leverage in trade negotiations, allowing the U.S. to dictate terms that prioritize its economic and strategic priorities.
A pollution tariff is a natural extension of President Trump’s trade agenda, perfectly aligned with his mission to protect American economic and national security. It would also force China to clean up its mess on the planet. Adopting a pollution tariff sends an unequivocal message: America will no longer tolerate China’s pollution haven free ride.
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Panic as US vacation rental boom collapses and owners rush to sell at steep discounts
Vacation homes are being dumped at a rapid rate as fresh fears of a housing market crash — and a shrinking pool of renters — rattle sellers.
The number of people buying second homes has plunged to its lowest level since records began, and is under a third of what it was during the pandemic boom.
A toxic mix of sky-high mortgage rates, soaring maintenance costs, and a widespread return-to-office push is fueling the trend.
In 2024, just 86,604 mortgages were issued for second homes across the United States.
That’s a 5 percent drop from the year before and down dramatically from the 258,289 in 2021.
At the height of the pandemic, remote workers who could afford it were fleeing big cities in droves and buying up homes in sunny spots like Florida and California.
Those days are over.
Vacation homes (second homes) made up just 2.6 percent of all US mortgages last year, according to a new analysis from Redfin. That’s half what it was in 2020.
Redfin began keeping records in 2018, when there were 175,644 second home mortgages in the US. They rose after that steadily until 2021 and have been falling since.
‘Most people aren’t buying vacation homes at all because mortgage rates and insurance costs — especially for waterfront properties — have skyrocketed,’ said Lindsay Garcia, a Redfin Premier agent in Fort Lauderdale.
It’s even worse for owners who depend on rental incomes to keep the home.
Airbnb demand has crashed and rental rates are priced too high, and landlords who want a quick profit just aren’t getting it.
Even the ultra-wealthy are ditching the vacation home.
They’re too expensive to hold onto while the markets are so risky.
In 2024, the average second home cost $495,000.
Mortgage rates have skyrocketed, driving up the overall monthly cost of maintaining a second home. It’s just not worth it for many.
Some were simply forced to sell as in-office mandates came back and full-time remote work is no longer an option.
In particular, Florida, once a vacation home buyers playland, is seeing the most second home listings hit the market.
In Miami, vacation-home mortgages plunged 32.2 percent in 2024.
Orlando, Fort Lauderdale, West Palm Beach and Tampa also saw huge drops.
Florida has a major problem due to rising insurance premiums, soaring HOA fees, and the constant threat of natural disasters turning many buyers off.
in the Northeast, Maine is also seeing a problem.
Second-home owners there are racing to offload their properties, spooked by fears of a house price crash and their financial future.
Maine once topped the nation for vacation ownership — nearly 1 in 5 homes there were second residences as of 2019.
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CA’s estimated $10B deficit ‘precisely’ matches illegal immigrant health care cost
California legislators have been told to expect a deficit of $10 billion or more even if revenues do not fall due to higher than anticipated spending, reports Politico.
Critics note that the $10 billion figure matches estimated costs of the state’s expansion of eligibility for Medi-Cal, the state’s taxpayer-financed health care system, to all income-qualifying illegal immigrants.
“What a fiscal coincidence: precisely the estimated cost of Gavin Newsom’s plan to extend state Medi-Cal to illegal immigrants,” said Will Swaim, president of the conservative California Policy Center on X.
Earlier this week, the state-funded Legislative Analyst’s Office warned the state’s economy is “stagnant” and “fragile” and that the budget is reliant on an “unsustainable” stock market. Earlier Friday, the LAO urged lawmakers to consider the possible negative downturn that tends to but does not always accompany significant decreases in consumer sentiment.
“If hard economic data fall in-line with worrisome economic indicators, the state’s revenue outlook will turn more negative; however, recent history suggests this outcome is far from certain,” wrote the LAO. “As such, we urge policymakers to weigh the risks of both the possibility of a further downturn and of better than expected growth when making budget decisions.”
Last year, the state narrowly closed a $73 billion deficit through a combination of spending cuts, deferrals, shifts, and reserve withdrawals.
Now, even if state tax revenue remains steady, rising non-discretionary spending, such as from Medi-Cal, combined with possible cuts or funding withholding at the federal level could leave the state billions of dollars short yet again.
Federal spending in California is set to be $171 billion this year.
In February, state officials said California had spent $9.5 billion thus far on Medi-Cal services for illegal immigrants, The Center Square first reported, resulting in California Gov. Gavin Newsom requesting a $6.4 billion emergency bailout to fund the program for the remainder of the fiscal year.
In April, Newsom bragged about the strength of the California economy, sharing it’s now the world’ fourth-largest economy in U.S. dollars — due to the relative decline of the Japanese yen to the dollar. After accounting for the high cost of goods and services, California only barely edges out low-performing Italy, and the state has shed hundreds of thousands of private sector jobs amid lower projected sales and corporate tax revenue.
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