US Treasury Secretary Urges Fed for 'Big Cut': "50bp Rate Reduction Needed in September"

Citing Employment and Inflation Data, Calls for Rate Cut
"Appoint Myron Before September FOMC"
"Trade Talks With China Planned Within 2-3 Months"

Scott Besent, U.S. Secretary of the Treasury, stated that the Federal Reserve (Fed) should implement a "big cut" by lowering the policy rate by 50 basis points (1bp = 0.01 percentage point) at its September meeting.

On the 12th (local time), in an interview with Fox Business, Secretary Besent said, "What we really need to consider now is whether a 50bp rate cut will take place in September," expressing this view.

Scott Besent, U.S. Secretary of the Treasury. Photo by EPA Yonhap News

Secretary Besent pointed out that the Fed might have cut rates in June or July if it had had access to the revised figures showing that the employment growth rates for May and June this year were significantly downgraded compared to the official announcements, which came just two days after the Fed decided to hold rates steady on the 30th of last month. He also noted that this report demonstrates that economists misjudged the anticipated effects of tariffs.

Regarding the Consumer Price Index (CPI) released that day, he described it as "fantastic" and emphasized that concerns about inflation due to President Donald Trump's tariff policy are unfounded.

Secretary Besent said he hopes that Steven Myron, Chairman of the White House National Economic Council, who was recently nominated by President Trump to succeed former Fed Governor Adriana Kugler, who recently resigned, will be appointed in time for the Federal Open Market Committee (FOMC) meeting scheduled for September 16-17. If Chairman Myron is confirmed by the Senate and appointed as a Fed Governor before then, it would further strengthen the case for a rate cut.

Regarding Chairman Myron, Secretary Besent said, "He will be a great voice at the Fed," and added, "He will bring change to the composition of the Fed."

When asked about a successor to Jerome Powell, the Fed Chair whose term expires in May next year, he said, "There is a very wide range of options," and added, "President Trump is very open-minded." As for the qualifications for the next Fed Chair, he cited three criteria: views on monetary policy, views on regulatory policy, and the ability to manage and reform the central bank organization.

Regarding the ongoing trade negotiations, he stated that the goal is to complete most of the negotiations within the next few months.

As for China, the biggest remaining issue in the negotiations, he said that although a specific date has not yet been set, discussions with Chinese officials are planned within the next two to three months. He also reported that although President Xi Jinping of China has invited President Trump, no schedule has been set yet.

This content was produced with the assistance of AI translation services.