Treasury Secretary Scott Bessent has urged Federal Reserve policymakers to keep an open mind on interest rates, arguing that AI-driven productivity gains and deregulation will help contain inflation even as fuel costs tied to the Iran conflict weigh on households. He compared today's economy to Alan Greenspan's approach during the 1990s internet boom and said Iran's remaining oil deliveries to China should end within about two weeks.
Treasury Secretary Scott Bessent has urged Federal Reserve policymakers to keep an "open mind" on interest rates, arguing that productivity gains from artificial intelligence and deregulation will help keep US inflation under control even as fuel costs tied to the Iran conflict weigh on households. Speaking on Fox News' Sunday Morning Futures, he framed the US economy as thriving under President Trump, crediting tax cuts and deregulation for the strength.
Bessent points to the Greenspan playbook
Bessent said Fed Chairman Kevin Warsh, whom Trump picked to lead the central bank, is well aware that current economic gains are comparable to, or potentially more substantial than, those seen when Alan Greenspan chaired the Fed during the 1990s internet boom. Greenspan, in Bessent's telling, let things run. Bessent argued the Fed's board and voting members should adopt a similarly open-minded stance given the deregulatory backdrop.
That framing lands against a live inflation debate. Diesel and gasoline prices, elevated for much of this year because of the Iran war and Ukrainian strikes on Russia's energy sector, have pushed up bond yields globally and fed directly into US price data.
Yet core consumer prices, which exclude food and energy, rose 0.3% in August and climbed 2.4% on an annual basis, according to government data released on September 11. Days after that release, the Fed under Warsh raised its benchmark interest rate for the first time since 2023.
Bessent calls core inflation resilient
Bessent characterized underlying inflation trends more favorably, saying core inflation has eased and has actually declined over the past several months, a framing that supports his broader case for the Fed to tolerate faster growth. He was also asked about China's role in the Iran conflict and said Beijing has substantially reduced any assistance to Tehran.
He estimated only about 15 million barrels of Iranian oil remain on the water bound for China and said he expects Iran to make its final delivery to Chinese buyers within roughly two weeks, after which China would have no further access to Iranian crude. Bessent suggested that dynamic adds to the pressure already building on Iran to reach a deal on reopening the Strait of Hormuz, tying the administration's domestic economic messaging directly to its broader strategy in the Iran standoff.
Source: InvestingLive
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