US treasury chief urges Fed to cut rates US treasury secretary Scott Bessent on Thursday called on the US Federal Reserve to cut rates, saying yields on two-year rates were lower than Fed fund rates. He told Fox Business Network’s “Mornings with Maria” program:
We are seeing that two-year rates are now below Fed funds rates, so that’s a market signal that they think the Fed should be cutting.
Last night, Donald Trump resumed his attacks on Federal Reserve chairman Jerome Powell, appearing to suggest he knew more about interest rates than him and that rates should be cut. The president told a White House event:
Mortgage rates are actually down slightly even though I have a guy in the Fed that I’m not a huge fan of. He should reduce interest rates. I think I understand interest a lot better than him, because I’ve had to really use interest rates.
Trump had also told bashed Powell at his his 100-day rally in Michigan on Tuesday:
Interest rates came down despite the fact that I have a Fed person who’s not really doing a good job, but I won’t say that… I want to be very nice and respectful to the Fed. You’re not supposed to criticize the Fed, you’re supposed to let him do his own thing, but I know much more than he does about interest rates, believe me.
Trump has repeatedly called on Powell to lower interest rates amid the market turmoil caused by his tariff announcements in April. He warned the Fed chair that he risks a US recession if he does not comply and at one point called Powell a “major loser”.
Powell has cited Trump’s massive tariffs on imports from nearly every country, except Russia, as a reason to fear inflation and so not lower rates.
Donald Trump looks on at Jerome Powell, his nominee to become chairman of the US Federal Reserve, at the White House on 2 November 2017. Photograph: Carlos Barría/Reuters
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