Bessent unmasks Trump’s goal for interest rate cuts

President Donald Trump has renewed pressure on the Federal Reserve to lower interest rates after the release of July’s inflation report, underscoring his longstanding demands for looser monetary policy. Knewz.com has learned that while Trump did not specify the scale of the cut he wants, a member of his administration provided insight into his expectations.

Bessent reveals Trump’s interest rate cut expectations

Treasury Secretary Scott Bessent recently said that the administration is considering a half-point cut at the Fed’s September meeting. “The real thing now to think about is, should we get a 50-basis-point rate cut in September,” he told Fox Business. His comments followed government data showing consumer prices climbed at the fastest pace in six months. The Consumer Price Index suggested that tariffs are contributing to inflationary pressure, but the rise may not be enough to stop the Fed from considering rate cuts at its next meeting. Following the release of the report, U.S. stocks rallied on expectations that the Fed might lower borrowing costs.

Trump’s previous calls for a full percentage cut

However, beyond the administration’s measured signals, Trump has been pushing more aggressively for a significant reduction. In posts on Truth Social, he urged the Fed to slash rates by a full percentage point, writing, “‘Too Late’ [Trump’s nickname for Federal Reserve Chair Jerome Powell] at the Fed is a disaster! Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!” He argued that lowering rates would reduce government borrowing costs on debt, particularly with much of it due in the short term. “There is virtually no inflation (anymore), but if it should come back, RAISE ‘RATE’ TO COUNTER. Very Simple!!! He is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!” Trump added.

Federal Reserve Chair holds firm

Federal Reserve Chair Powell, however, has resisted calls for deep cuts. The Fed has held its benchmark rate between 4.25% and 4.5% for three consecutive meetings, citing inflation risks tied to tariffs and economic uncertainty stemming from trade disputes with China and other partners. It is worth noting that the Fed has not cut rates by a full percentage point since March 2020, when it moved in response to the COVID-19 crisis. Market projections show little chance of a similar move this year.

Powell defends Fed’s approach to interest cuts

Powell defended the Fed’s approach, stating, “The economy has been resilient and part of that is our stance. … That is what matters to us, pretty much that’s all that matters to us.” His position reflects a cautious balance between managing inflation pressures and sustaining growth.

The post Bessent unmasks Trump’s goal for interest rate cuts appeared first on Knewz.