Pressure Mounts on Federal Reserve to Slash Rates

US Treasury Secretary Scott Bessent has openly called for the Federal Reserve to implement a series of interest-rate cuts, suggesting a reduction of at least 1.5 percentage points from the current benchmark. "I think we could go into a series of rate cuts here, starting with a 50 basis-point rate cut in Sept," Bessent stated during a recent interview.

Revised Labor Market Data Could Have Influenced Earlier Cuts

Bessent speculated that had Fed policymakers been aware of revised labor market data prior to their last meeting, rate cuts might have been enacted in June and July. The Fed's current benchmark remains at a target range of 4.25-4.5%, unchanged throughout the year.

Breaking Tradition with Public Rate Cut Advocacy

Traditionally, Treasury secretaries avoid specific recommendations on Fed rates, focusing instead on past policy discussions. Bessent's remarks mark a departure from this norm, echoing President Trump's criticisms of Fed Chair Jerome Powell for not reducing rates amidst ongoing tariff hikes and their inflationary impacts.