Bescent explains that Trump is no longer asking for requests
This week, we gained some strong support due to our assertion that President Donald Trump is not demanding that the Federal Reserve cut interest rates.
Secretary of the Treasury Scott Bescent Interviewed this week by Fox Business Network's Larry Kudrow. He argued that the administration not only pushed for cuts from the Fed but also had no focus on the Fed's monetary policy at all. Instead, the administration believes it Its fiscal and regulatory policies will cut long-term interest rates This directly affects mortgages, car loans, credit card fees, and more.
US Treasury Secretary Scott Bescent (left) took part in an interview with Larry Kudrow at Fox Business Studios on February 5, 2025. (Paul Morigi/Getty Images)
“He's not asking the Fed to lower the fees,” Bessent told Kudlow. “If you regulate the economy, if you complete this tax bill, if you keep the energy down, the tax rate will take care of yourself and the dollar will handle itself.”
Bescent said he and Trump were the same. Focused on 10 years of financial yields rather than overnight interbank rates. Fed target. He noted that Treasury yields rose over the past 10 years after the Fed enacted an ultra-large 75 basis point cut in September. This is mainly because investors have begun to reassess how short-term low interest rates can ultimately progress, given the sustainability of inflation. It could also be that the market view that the end of the Biden administration's cuts is likely to be wrong, as the labor market was stronger than when things were temporarily discontinued last summer.
On Thursday, Bessent appeared on Bloomberg TV and repeated his message. “We're not focusing on whether the Fed will cut or not,” he said.
As I pointed out last week, when the Fed decided not to cut interest rates last week, Trump did not criticize the decision. Instead, he accessed social media accounts and blown up the Fed because he lost control of inflation during the Biden administration. When asked about the Fed's decision over the weekend, Trump said he expects the Fed to be stable.
“I'm not surprised.” Trump told reporters Sunday night. “I think it's the right thing to do at this point to keep the fee.”
Real economy growth will lower long-term rates
Bescent and Trump recognize that inflation is the reversal of the Biden administration and that early cuts from the Fed could now trigger inflation and a revival. It could put public support for President Trump at risk.
Trump is actually It has suppressed some of his criticism of the Fed. He could have easily pointed out that even if the Fed fell below the Fed's target, the Fed raised interest rates seven times during his first term as president. Ultimately, the Fed reversed the course and began cutting back in 2019. More or less, I admitted that it was too hawk. Then, when Joe Biden sprinted through his reckless spending plan, the Fed stayed on the sidelines, maintaining super high interest rates, and contributed to the worst inflation in 40 years. At the end of Biden's term, the Fed began to cut once again, despite inflation demonstrating very low stickiness and unemployment rates.
It's very similar to us Politicized Feds finding reasons to become dogs when Democrats are in office And why Trump becomes a hawk when he is in the White House. But Trump has prevented him from pointing this out publicly.
Wisely, Trump and Bescent are Focusing on the real economy rather than monetary policy. Bessent explains that he believes the 3-3-3 plan could have significant results on Main Street. Actual GDP growth of 3%, the deficit is reducing to 3% of GDP (from more than 6% today), increasing us. Oil production is 3 million barrels a day.
The government is Bets that lower energy prices will become an important weapon against inflation. Consumers' expectations of inflation, and their overall confidence, are closely tied to what they are paying for at the pump. “So, if we can bring gasoline back and heat the oil, not only will consumers save money, but optimism for the future will allow them to rebuild their lives,” Bescent said. He told Kudrow.
