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Bessent Hints Fed Should Be Open to Half-Point Interest-Rate Cut

(Bloomberg) -- Treasury Secretary Scott Bessent suggested that the Federal Reserve ought to be open to a bigger, 50 basis-point cut in the benchmark interest rate next month, after having skipped a move at the last meeting.

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“The real thing now to think about is should we get a 50 basis-point rate cut in September,” Bessent said in an interview on Fox Business Tuesday.

He spoke hours after what he described as an “incredible” inflation report for July. The consumer price index rose 0.2% from the previous month, while the core gauge, excluding food and energy costs, matched economists’ expectations with a 0.3% rise. While services inflation picked up, goods prices were more subdued, despite President Donald Trump’s tariff hikes.

Bessent also said he was “hopeful” that Trump’s pick for the currently open position on the Fed board, Stephen Miran, will be in place in time for the Sept. 16-17 policy meeting. He noted that Miran, the head of the White House Council of Economic Advisers, needs to be confirmed by the Senate.

Miran was tapped to fill a board seat that runs to January. Bessent said it’s possible that he could be asked to “stay on” for a further term. Full Fed board terms are 14 years.

As for the nominee to succeed Fed Chair Jerome Powell, whose time at the helm expires in May, Bessent said Trump is casting a “very wide net.”

The Treasury chief cited three criteria for the pick for chair — the person’s views on monetary policy, regulatory policy and an ability to run and revamp the central bank as an organization. The Fed “got bloated” over the time, and that has put its independence over monetary policy at risk, Bessent said.

Trump has regularly criticized Powell for failing to oversee a rate cut this year. The Fed chief and many of his colleagues have said they want to see greater evidence about any impact on inflation and inflation expectations from the tariff hikes.