Treasury Secretary Scott Bescent called on central bankers on Wednesday to implement a half-point rate cut at their upcoming meeting next month.
He suggested that the central bank’s target rate should be lowered by at least 1.5 percentage points from its current level.
“I think we should start a series of rate cuts, beginning with a 50 basis point reduction in September,” Bescent explained during an interview with “Bloomberg Watch.”
Bescent indicated that, by analyzing the data, a reduction of about 150 to 175 basis points might be more appropriate.
Just a note, base points represent one-hundredth of a percentage point.
After their July meeting, central bankers decided to maintain interest rates within a target range of 4.25% to 4.5%.
Bescent criticized Fed officials for not cutting rates in July, especially in light of significant downward adjustments to labor market data that emerged just two days later.
“I think we could have considered cuts in both June and July,” he remarked.
Earlier this month, the Bureau of Labor Statistics revised its payroll figures, indicating there were 258,000 fewer jobs added in May and June than previously reported.
Following this, President Trump dismissed Erica Mantelfer, who headed the department, and appointed Eji Antoni, a known critic of labor statistics, as her replacement.
Moreover, Trump has intensified his criticisms of Federal Reserve Chairman Jerome Powell, labeling him as “silly” and “difficult.” This week, he even filed a lawsuit against Powell regarding a request for a $2.5 billion renovation of the Fed’s headquarters.
For a while now, Powell and other Fed officials have taken a cautious approach, waiting to gather more evidence on how tariffs might influence inflation before deciding on any rate cuts.
On Wednesday, Bescent noted that there could be 10 or 11 contenders vying to succeed Powell when his term ends in May 2026.
While he didn’t reveal any specific names, he mentioned that the candidates include both current officials from the Fed and individuals from the private sector.
Bescent also expressed that he doesn’t foresee Stephen Milan, a Trump supporter who was nominated to continue at the Fed, remaining beyond the expiration of his term in January.
