Bessent: Additional Rate Hikes by U.S. Treasury Secretary Not a Mistake

Scott Bessent, the U.S. Treasury Secretary, stated that the Federal Reserve's (Fed) additional interest rate hikes may not be a policy mistake. This contrasts with the position of President Donald Trump, who has been calling for rate cuts. Bessent emphasized that the Fed should take a flexible approach when assessing inflation. According to an interview with the Wall Street Journal and CNBC on the 28th, Bessent responded to a question about whether further rate hikes would be a mistake by saying, "Not necessarily." He expressed confidence in the monetary policy management capabilities of Fed Chair Kevin Warsh. The Fed decided to keep the benchmark interest rate unchanged at 3.75% to 4.00%, with 10 votes in favor and 2 against. Bessent mentioned that the Fed's statement reflected a positive assessment of the economy and predicted strong GDP growth for the third quarter. However, he added that price pressures due to rising energy prices should be assessed cautiously. The interest rate futures market is reflecting a high likelihood of additional hikes at the Fed's December meeting.

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