Treasury Secretary Scott Bessent has called on the Fed to lower interest rates by 50 bps during the September 16-17 Federal Open Market Committee (FOMC) meeting.
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“I think we could go into a series of rate cuts here, starting with a 50 basis point rate cut in September,” Bessent said in an interview with Bloomberg on Wednesday.
Bessent took his call one step further by saying that many economic models suggest “we should probably be 150, 175 basis points lower.”
May and June’s Revised Payrolls Could Have Led to Rate Cuts, Says Bessent
Bessent added that May and June’s downwardly revised nonfarm payrolls of a combined 285,000 jobs could have compelled the Fed to cut rates in June and July. However, the Bureau of Labor Statistics didn’t release this data until two days after the July FOMC meeting. “I suspect we could have had rate cuts in June and July,” said Bessent.
The odds of a 25 bps rate cut at the September FOMC meeting sit at 99.9%, up from 93.9% yesterday and 94.6% a week ago, according to CME’s FedWatch tool. The odds of a 50 bps or greater reduction remain at 0%.
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