U.S. Treasury Secretary Scott Bessent has urged the Federal Reserve to consider a 50-basis-point interest rate cut at its upcoming policy meeting on September 16–17. According to Bessent, the Fed “missed an opportunity” to ease monetary policy in June and now needs a bolder move to make up for the delay.
Bessent emphasized that such a decision could support the economy amid signs of a cooling labor market and moderating inflation. His comments also align with President Donald Trump’s recent call for rate cuts, though Trump did not specify the size.
Divisions Within the Fed
While Bessent and some economists advocate for a more aggressive reduction, members of the Federal Reserve remain cautious. Atlanta Fed President Raphael Bostic has signaled a preference for a smaller, 25-basis-point cut, stressing that more data must be assessed before making a decision.
Economist Jeremy Siegel described the possibility of a 50-basis-point cut as “entirely plausible,” citing recent dovish signals from Fed officials and a slowdown in inflation trends.
Market Expectations
Markets are already pricing in a September cut, but uncertainty remains over its magnitude. A 50-basis-point move could signal a sharper policy shift, potentially impacting the U.S. dollar, Treasury yields, and risk asset appetite.
Source: Reuters, MarketWatch, FXStreet
