Treasury Secretary Scott Besent opens about the status of the US economy and negotiations with other countries on special reports.
Treasury Secretary Scott Besant On Thursday, the financial markets are pricing in a high probability of the Federal Reserve, which are cutting interest rates before the end of the year amid concerns about tariffs to increase inflation.
Bessent, during an appearance on Fox News’ “Special Report with Brett Bair,” Said that Fed stabilized the interest rates for its fifth direct meeting in late July, with consumers “lack of logic” to “lack of logic” to “lack of logic” on the economy, citing concerns about tariff-inspired inflation.
“On one hand, they were saying that we need to wait, risk management, we need to see if we are going to see inflation from the tariff,” Besent said. “Again, it does not have inflation. One time price is similar to adjustment, you know, if your driver’s license is more cost this year? Then, on the other hand, they reduced their economic estimates for the year. Therefore, traditionally when economic estimates go down, interest rates go down.”
“Now the market is pricing in sufficient possibility of cutting rates in the coming months, and I hope the Fed will follow the market,” Besant said.
Now Fed Betting Fed will cut rates after displaying jobs report in September
Treasury Secretary Scott Besent said that market rate cuts are rapidly watching. (Magnus Lejhall/TT News Agency/AFP Getty Image)/Getty Images)
Market is currently pricing at 89.4% likely to cut a 25-base-point rate. federal Reserve According to the CME Fedwatch Tool, it holds its next meeting in mid -September.
It also sees that by the end of the year, the current is much lower in rates than the current target range of 4.25% to 4.5%, with 45.7% probability of 75-basis-points cuts and 42.6% of the 50-bases-points from that level after the Fed’s December meeting.
Bessent also emphasized that the price increase in the price stems from the tariff could increase only once the price, saying that inflation pressure has been relatively modest.
Tariffs are taxes on imports that are paid by importer, which usually pass some of the high costs or to all through high prices. (Photo by Spencer Plot / Getty Image / Getty Image)
“Thus, we have not seen a transmission in prices, and if we do, it can be a one -time price adjustment. But what we are seeing is still eating it,” Besant said. “Foreign companies only take advantage of America for so long, that American companies are doing a lot of tariffs, and you know, perhaps, we will see some price below for consumers.”
“Overall, inflation has been very much – you know, very newborn, and as a matter of fact, two months ago, we saw a decline of inflation for the first time in four years,” he said.
Fed has stopped rate cuts because Stubborn inflation It has been above its 2% long lasting target, while the labor market has been in solid size with 4.2% unemployment rate.
Federal Reserve Chairman Jerome Powell has said that the central bank is well deployed to respond to the decline in economic conditions. (Kent Nishimura / Getty Image / Getty Image)
While inflation is below the 40 -year high in 2022, it has away from 2% target in recent months since its final decline in April.
Those inflation trends had reduced the approach to cut rate until they saw the revival after a weak-to-appent. July job reports It was released on Friday, with only 73,000 jobs found last month – below 110,000 estimates of economists voted by LSEG.
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The report also included amendment of large downwards by May and June, cutting 258,000 jobs from earlier estimates for those months. This showed the labor market as weaker than before, which in turn re -awakened the market hopes of cuts cut in the September rate.
