U.S. Treasury Secretary Scott Bessent said interest rates are too restrictive and signaled the Trump administration supports an aggressive monetary easing cycle beginning as soon as September.
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"We should be 150-175 basis points lower on the fed funds now," Bessent said during a Bloomberg interview on Wednesday, calling current rates overly tight.
He added that if recent labor data from the Bureau of Labor Statistics had been more accurate in earlier months, the Federal Reserve would have already cut rates in June or July.
He expressed hope that a 50 basis point rate cut will arrive in September and highlighted that Fed Chair Jerome Powell risks repeating outdated monetary strategies.
“They tried to be more data-driven, but it’s just very old-fashioned thinking,” Bessent said.
“We could go into a series of rate cuts here, starting, I’m hopeful about the September meeting,” he added.
Bessent indicated the administration has begun a formal process to pick Powell's successor, though he emphasized that President Donald Trump isn't aiming to fire him early. He revealed that Trump's team is vetting 10–11 private-sector candidates to potentially shake up Fed leadership next year.
Bessent flagged the White House's concerns about the recent cost overrun on the Fed's renovation project.
“The president is concerned about the building and those massive cost overrun. There’s no oversight in terms of the spending. The president and I are both concerned about the foundations of the Fed”
Trump-Putin Meeting: ‘Sanctions Can Go Up — Or Be Loosened’
On the upcoming Trump-Putin summit in Alaska, Bessent said the goal is "to end the bloodshed, but not at any cost."
According to Bessent, Trump is preparing to lay out clear leverage options to Putin, including sanctions that "can go up, or they can also be loosened."
"The president is the best at creating leverage," Bessent said. "He will make it clear to President Putin that all options are on the table."
Bessent leveled sharp criticism at European leaders, accusing them of being reluctant to implement the kind of aggressive secondary sanctions that could tighten Russia's access to international markets.
"I was at the G7 meeting in Canada with President Trump," Bessent recalled.
"The Europeans kept talking about Senator Graham's bill to do the secondary tariffs. I said, ‘Is everyone at this table willing to put a 200 percent secondary tariff on China?' And you know what — everybody looked at their shoes."
"We need the Europeans to come in and help create more leverage," Bessent added.
Capitol Hill Stock Ban: ‘Hedge Funds Would Be Jealous‘
Bessent said he is pushing for a Congressional ban on single-stock trading, citing "eye-popping returns" among lawmakers that erode public trust.
“Some of these eye-popping returns, whether it’s Rep. Pelosi or Senator Wyden, every hedge fund would be jealous of them”
"My hedge fund didn't have that many trades," he said, referencing a member of Congress with over 1,200 trades in a year.
He suggested a model similar to his former firm: members could invest in broadly held exchange-traded funds like the Vanguard S&P 500 ETF (NYSE:VOO) but not individual stocks, and with longer holding periods.
"If any private citizen traded this way, the SEC would be knocking on their door," Bessent said. "People shouldn't come to Washington to get rich."
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