Treasury Secretary Scott Bessent has urged the Federal Reserve to keep the door open for a larger 50-basis-point rate cut at its September meeting. Speaking to Fox Business on Tuesday — just days after the Fed left rates unchanged at its July 30 meeting — Bessent said the key question now is whether the Fed should opt for a half-point cut next month.
According to Bessent, newly revised data shows that job growth in May and June was weaker than initially reported. “If the Fed had seen these figures earlier, it could have started cutting rates back in June or July,” he noted.
Service Inflation Surprises Analysts
Fresh data also showed that in July the Consumer Price Index (CPI) rose by 0.2%, while core CPI (excluding food and energy) rose by 0.3%, in line with forecasts. Goods prices remained subdued despite higher tariffs, but inflation in the services sector accelerated.
“Everyone expected the main pressure to come from goods, but what we actually saw was an unusual rise in service prices,” the secretary said.
Markets Betting on a Deeper September Cut
Positive economic news pushed the S&P 500, Nasdaq, and Dow Jones up by 1–1.4%. Investors increasingly believe that the Fed will ease policy in September. Futures markets now reflect a high probability of at least a 25-basis-point cut and growing odds of the half-point reduction Bessent has mentioned.
Bessent also expressed hope that President Trump’s nominee for the open seat on the Fed’s Board of Governors — Stephen Miran, currently head of the White House Council of Economic Advisers — will be confirmed in time for the key September 16–17 policy meeting. While Miran’s term is set to end in January, Bessent suggested he could be asked to stay longer.
Trump Searching for Powell’s Successor
When asked who might replace Fed Chair Jerome Powell after his term expires in May, Bessent said President Trump is casting a “very wide net,” evaluating candidates based on their positions on monetary and regulatory policy and their willingness to reform the Fed’s structure. He argued that the institution has “grown too large” and risks losing its independence.
Criticism of Renovation and Push for Trade Deals
Bessent also sharply criticized the $2.5 billion renovation of the Fed’s Washington headquarters, noting that he is personally paying for renovations to his own Treasury Department office. According to him, Trump has long been frustrated by both the project’s cost and the Fed’s reluctance to cut rates this year.
On trade, the secretary said the U.S. is in a strong position and aims to secure major agreements with key partners in the coming months. He also highlighted over $10 trillion in private-sector investments since Trump’s return to the White House.
Bessent added that several major trade deals remain unfinished, including those with Switzerland and India. On India, he acknowledged that its stance so far has been “somewhat reluctant,” but he hopes the Trump administration can conclude negotiations by the end of October.
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