Bessent denies pressuring Fed to slash rates

US Treasury Secretary Scott Bessent

US Treasury Secretary Scott Bessent clarified that he is not calling for interest-rate cuts by the Federal Reserve, saying his remarks only highlighted models touting the neutral rate about 150 basis points (bps) lower.

In an interview with Fox Business, Bessent said he “did not tell the Fed what to do,” walking back his comments a day earlier, when he suggested the Fed should be open to a half-point reduction in the wake of slowing job growth.

“What I said was that to get to a neutral rate on interest, that that would be approximately a 150-bp cut,” Bessent was quoted as saying.

The neutral rate is the rate that keeps the economy steady — neither speeding it up nor slowing it down.

Prior to this statement, on the Bloomberg News TV, Bessent said, “We could go into a series of rate cuts here, starting with a 50-bp rate cut in September… We should probably be 150, 175 [bps] lower. I think the committee needs to step back.”