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Bessent says Fed should wait for Warsh before cutting rates now
US Treasury Secretary Scott Bessent crossed the wires on Tuesday, stating that he’s “quite confident” that core prices would continue to edge lower in the US despite the Iran war, and that he’s pressing the Federal Reserve (Fed) to cut rates.Bessent added that he understood Fed policymakers wanted to assess economic developments linked to the Middle East conflict before deciding what to do with rates. He added that Donald Trump’s nominee, Kevin Warsh, should lead the next easing cycle. When asked about Jerome Powell standing as Fed Chair if the Senate does not approve Warsh’s nomination, he said that “We want Kevin Warsh in as soon as possible.”Key highlights:FED COULD OBSERVE BEFORE THEY CUT RATES; EMPHASIS IS THAT THEY WILL NEED TO CUT RATESFED SHOULD WAIT UNTIL WARSH IS IN PLACEWE HAVE PUT IN 10% SECTION 122 TARIFFS; PRESIDENT HASN’T OPTED TO LIFT THAT RATE TO 15% AT THIS POINT IN TIMEI’M QUITE CONFIDENT THAT CORE INFLATION WILL CONTINUE TO GO DOWNWE WANT TO GET A HOUSING BILL PASSED, WANT KEVIN WARSH IN AS FED CHAIR AS SOON AS POSSIBLE Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis. In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice d...
Bessent suggests Fed should hold off on rate cuts amid war ... - POLITICO
Treasury Secretary Scott Bessent on Tuesday signaled he had no objection to the Federal Reserve keeping interest rates on hold for now as officials monitor the fallout from the Iran war, but added ...
Treasury Secretary Confident Core Inflation Will Fall, Calls for Fed ...
U.S. Treasury Secretary Scott Bessent expressed confidence that core inflation will continue to decline in the United States, despite the ongoing Iran war. Bessent reiterated his call for the Federal Reserve to cut interest rates, stating that it makes sense for President Trump's nominee, Kevin Warsh, to lead the next cycle of monetary adjustments.
Treasury Secretary Bessent's Inflation Outlook Amid Iran Conflict
U.S. Treasury Secretary Scott Bessent expressed confidence that core inflation would decline in the U.S. despite tensions from the Iran war. He urged the Federal Reserve to reduce interest rates while acknowledging the need for caution. Bessent emphasized the urgency of appointing Kevin Warsh as the next Fed chair.
