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Bessent Chides Powell for Not Championing Interest Rate Cuts

(Bloomberg) -- Treasury Secretary Scott Bessent expressed disappointment that Federal Reserve Chair Jerome Powell hasn’t clearly established an agenda for cutting interest rates.

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“Rates are too restrictive, they need to come down,” Bessent told Maria Bartiromo in an interview on Fox Business Wednesday morning. “I’m a bit surprised that the chair hasn’t signaled that we have a destination before the end of the year of at least 100 to 150 basis points.”

Powell, in remarks at an event in Rhode Island on Tuesday, said the central bank had to contend with both a weakening labor market and the risk of higher inflation as it weighs future decisions.

“Near-term risks to inflation are tilted to the upside and risks to employment to the downside — a challenging situation,” Powell told the Greater Providence Chamber of Commerce. “Two-sided risks mean that there is no risk-free path.”

Bessent, in the Fox Business interview, said he was “not sure why Chair Powell has backed up a bit here.” He went on to praise the new Fed governor, Stephen Miran, whose nomination by President Donald Trump, was approved by the US Senate right before last week’s Fed meetings.

Miran, who argues that the central bank should aggressively lower interest rates, dissented when the Fed agreed to lower interest rates by a quarter percentage point. He preferred a half percentage point cut. “It’s good to get some new blood in there,” Bessent said. “Stephen has said more in a week, more in a week than the Biden administration appointees have said during their entire tenure.”

Asked about the search for a successor to Powell, Bessent said he was interviewing 11 candidates and “there are going to be a lot of interviews next week.”