US Treasury Secretary Scott Bessent Advocates for Half-Point Interest Rate Cut at Federal Reserve Meeting

US Treasury Secretary Scott Bessent has publicly urged the Federal Reserve to implement a half-point interest rate cut at its next policy meeting in September. Speaking on Bloomberg Surveillance, Bessent emphasized the need for a series of rate reductions, arguing that the central bank’s benchmark rate, currently set at a target range of 4.25% to 4.5%, should be lowered by at least 1.5 to 1.75 percentage points. His comments come in the wake of recent economic data showing US inflation remaining steady at 2.7% for July, a figure that Bessent believes supports the case for monetary policy easing. Bessent also referenced revised labor market data released by the Bureau of Labor Statistics on August 1, which downwardly adjusted payroll gains for May and June by a combined 258,000 jobs. He suggested that had Federal Reserve officials been aware of these revisions earlier, rate cuts might have been implemented as early as June or July. The Fed maintained its benchmark rate at the last policy meeting on July 30, a decision Bessent appears to view as potentially outdated given the updated economic indicators. In addition to his remarks on monetary policy, Bessent discussed a recent revenue-sharing agreement brokered by the White House with US chipmakers Nvidia and AMD. Under this deal, influenced by pressure from former President Donald Trump, the companies agreed to allocate 15% of their Chinese chip sales to the US government in exchange for export licenses. Bessent indicated that this model, currently unique to the semiconductor industry, could serve as a prototype for similar arrangements in other sectors. 'I think we could see it in other industries over time. Now that we have the model and the beta test, why not expand it?' he told Bloomberg TV. The Treasury Secretary’s call for rate cuts has coincided with market reactions, including a rally in global stocks, a weakening US dollar, and the British pound reaching a three-week high. However, the Federal Reserve’s next steps remain uncertain as policymakers weigh incoming economic data ahead of the September meeting. Bessent’s advocacy for lower rates and his comments on industrial policy reflect ongoing discussions about balancing economic growth and strategic national interests.