The Federal Reserve May Not Cut Rates, Basant Clarifies the Intent of His Remarks

According to reports, U.S. Treasury Secretary Basant clarified that he did not call for the Federal Reserve to implement a series of rate cuts, but merely pointed out that models indicate the neutral interest rate is about 1.5 percentage points lower than the current level. Basant clearly stated, 'I did not tell the Federal Reserve what to do.' He responded to the previous day's statement about the Federal Reserve 'being able to start a series of rate cuts,' explaining that he was not suggesting a rate cut, but rather citing that the neutral interest rate indicated by the model is 150 basis points lower than the existing level.