US treasury secretary Scott Bessent made his most explicit call yet for the Federal Reserve to execute a cycle of interest-rate cuts, suggesting the central bank’s benchmark ought to be at least 1.5 percentage points lower than it is now.“I think we could go into a series of rate cuts here, starting with a 50 basis-point rate cut in Sept,” Bessent said in an interview on Wednesday. “If you look at any model” it suggests that “we should probably be 150, 175 basis points lower” (100bps = 1 percentage point).Fed policymakers last month kept their benchmark at a target range of 4.25-4.5%, where it’s been all year. Bessent said officials might have cut rates if they’d been aware of the revised data on the labour market that came out a couple of days after the latest meeting. “I suspect we could have had rate cuts in June and July,” Bessent said.Treasury secretaries have typically shied away from making specific calls on Fed rates, and Bessent has said for months he would only discuss the central bank’s past policy decisions – not their upcoming ones. Trump has repeatedly criticised Fed chief Jerome Powell for refraining from rate cuts this year. Powell and many colleagues have said they want to see more evidence about the inflationary impact of the tariff hikes. bloomberg
