Scott Bessant, U.S. Secretary of the Treasury, stated that the Federal Reserve could cut rates before September due to the low inflation impact from tariffs.

MAIN CONTENT

  • Tariffs have not caused significant inflationary pressure in the U.S.

  • The Fed may act to cut rates earlier than expected, before September.

  • Pressure from the president urging the Fed to cut rates aggressively.

What does Scott Bessant think about the impact of tariffs on inflation?

Scott Bessant asserts that the tariffs imposed by the government have not significantly increased inflation. He bases this analysis on real observations and current economic data, helping to clarify the actual impact of tariffs on the U.S. economy.

I think the bottom line is that tariffs have not really caused inflation to rise.

Scott Bessant, U.S. Secretary of the Treasury, speaking on Fox News, 02/07/2024

Why does Scott Bessant believe the Federal Reserve (Fed) will cut rates earlier than September?

Mr. Bessant believes that if the Fed relies on the current inflation impact criteria of tariffs, they may decide to cut rates before September. The actual economic pressure from tariff policies is considered mild, so the Fed has grounds to expand monetary stimulus early.

What factors are driving the Fed to consider a strong rate cut?

The important reason lies in the pressure from President Trump wanting the Fed to cut rates by 3 percentage points to stimulate economic growth. The economy is currently facing complex influences, but lower borrowing costs help businesses and consumers access capital more effectively.

It can be said that the 'tariff disorder syndrome' has influenced the Fed's decisions.

Scott Bessant, U.S. Secretary of the Treasury, on the Ingraham View program, 02/07/2024

What is the potential impact of an early rate cut on the U.S. economy?

The Fed's early rate cut not only meets expectations to boost growth but also helps reduce borrowing costs, stimulating investment and consumption in the short term. However, this decision also needs careful consideration as inflation remains a long-term potential risk.

Comparing the Fed's interest rate scenarios

Scenario Timing of Rate Cut Expected Reduction Main Impact Hold steady until September September 2024 Hold steady or slightly reduce Stability, assess new data Reduce before September Before September 2024 Decrease 1–3 percentage points Stimulate the economy, low borrowing costs

Frequently Asked Questions (FAQ)

How do tariffs affect current inflation forecasts?

According to experts, tariffs have not significantly increased inflation beyond control due to domestic demand and quickly adapting supply chains.

When is the Fed expected to cut rates?

The Fed is likely to cut rates just before September 2024 based on current economic developments and political pressure.

How will the rate cut affect consumers?

Cutting rates helps lower borrowing costs, supporting both consumer and business investment.

Why is the U.S. President pressuring the Fed to cut rates aggressively?

The president wants to stimulate the economy quickly and strongly to boost growth and reduce the risk of recession amid the trade war.

What are the risks of cutting rates too early?

It may put pressure on inflation to rise again or create asset bubbles if not well controlled.

Source: https://tintucbitcoin.com/fed-co-the-ha-lai-suat-som/

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