U.S. Treasury Secretary Foresees Fed Rate Reduction

In a recent interview with Fox News, U.S. Treasury Secretary Scott Bessent projected that the Federal Reserve (Fed) could implement rate cuts by September at the latest. This comes as President Donald Trump continues to urge Fed Chairman Jerome Powell to lower interest rates to stimulate the economy.

Debate Over Tariffs and Inflation

Bessent critiqued the Fed's current criteria for rate decisions, particularly its stance on tariffs not being inflationary. "If they are going to follow that criteria, I think that they could do it sooner than then, but certainly by September," he stated, expressing his disagreement with the Fed's approach.

Fed's Stance on Interest Rates

The Fed has maintained the benchmark interest rate at 4.25-4.50% since the beginning of Trump's second term, citing concerns over potential price increases due to the administration's tariff policies. Bessent questioned the Fed's June summary of economic projections, which raised inflation forecasts while lowering growth projections.

Elon Musk's Opposition to Tax Cut Bill

Addressing Tesla CEO Elon Musk's opposition to the recent Trump tax cut bill, Bessent dismissively remarked, "If Elon sticks to rockets, I’ll stick to finance." He also downplayed concerns about the bill exacerbating the fiscal deficit, confident in its ability to pay off the debt.