Bessent adds to pressure on Fed, drawing criticism

Treasury chief makes comment on interest rates. Economist says it's not part of the job.

- BY DANIEL FLATLEY

ANDREW HARNIK Getty Images TREASURY Secretary Scott Bessent attends a conference Friday in Anchorage.

U.S. Treasury Secretary Scott Bessent said he isn't calling for a series of interest-rate cuts from the Federal Reserve, just pointing out that models suggest a “neutral” rate would be about 1.5 percentage points lower.

"I didn’t tell the Fed what to do,” Bessent said Thursday in an interview on Fox Business, referring to his comments a day before about how the central bank “could go into a series of rate cuts here.”

Bessent said Thursday that “what I said was that to get to a neutral rate on interest, that that would be approximately a 150-basis-point cut.”

The so-called neutral rate is the level at which policy neither stimulates nor restricts the economy. Fed Chair Jerome Powell said July 30 that there are “a range of views of what the neutral rate is at this moment for our economy” and that his own estimate was that the current setting was “modestly restrictive.”

"I believe that there is room, if one believes in the neutral rate,” for a series of rate cuts, Bessent said. “I'm not calling for one. I didn't call for one. I just said that a model of a neutral rate is approximately 150 basis points lower.”