“There’s a very good chance of a 50 basis point rate cut,” Bessent said in the interview. “We could go into a series of rate cuts here, starting with a 50 basis point rate cut in September.”
He sees rates needing to fall by 150 to 175 basis points to support the economy.
Bessent also commented on future Federal Reserve leadership, noting that President Trump is keeping an “open mind” on the next chair, with a list of 10–11 potential candidates under consideration. He also acknowledged that replacing the Fed chair alongside the recent appointment of Anthony Antoni to lead the Bureau of Labor Statistics — after dismissing his predecessor — has raised questions about political influence over economic data and policy.
However, Bessent argued that stable 10-year Treasury yields show markets retain confidence in both the Treasury and the Fed, suggesting investors are not overly concerned about political appointments or data credibility.
He also floated the possibility of more secondary measures against Russia and 200% secondary sanctions on China during a recent G-7 meeting. This comes amid tariff tensions with Russia in order to end the war with Ukraine.
The US has also penalised India for its purchase of oil from Russia.
On the broader economic outlook, Bessent said the US is returning to “normal, pre-COVID margins” and called for a substantial easing of Federal Reserve interest rates, arguing current levels are “constrictive.”
