US Treasury Secretary Scott Bessent Demands Steep Fed Rate Cuts, Hints at Broad Export Tax
US Treasury Secretary Scott Bessent Demands Steep Fed Rate Cuts, Hints at Broad Export Tax
US Treasury Secretary Scott Bessent has intensified pressure on the Federal Reserve, reiterating his call for a significant half-point interest rate reduction at the central bank’s upcoming September meeting. Bessent advocated for a series of further rate cuts, arguing that the Fed’s benchmark rate should be at least 1.5 percentage points lower than its current target range of 4.25% to 4.5%, maintained since their July 30 policy meeting.
His comments, made in a television interview today, follow data showing US inflation held steady at 2.7% in July. Bessent suggested that the Fed might have initiated cuts sooner, possibly in June or July, had officials been aware of revised labor market data released on August 1, which revealed a downward revision of 258,000 payroll gains for May and June.
In related news, Bessent also floated the idea of expanding the unprecedented revenue-sharing agreement struck with US chipmakers Nvidia and AMD to other industries. Under the current deal, these companies share 15% of their Chinese chip sales with the US government in exchange for export licenses. Bessent believes this model, initially unique, could be expanded.
The prospect of rate cuts has already buoyed global markets, with world share indices hitting record levels and the dollar weakening, while the pound has surged to a three-week high against the dollar.
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