U.S. Treasury Secretary Scott Bessent said on Tuesday he remains confident that core inflation in the United States will continue to trend lower despite the ongoing Iran war, and he repeated his call for the Federal Reserve to start cutting interest rates.
Bessent acknowledged the case for caution by Fed officials, saying he could understand if they preferred to observe how economic conditions evolve in response to developments related to the war before initiating rate reductions. At the same time, he expressed a clear view on the leadership he sees as appropriate for the next phase of monetary policy.
Specifically, Bessent said it made sense for President Donald Trump’s nominee for Federal Reserve chair, Kevin Warsh, to preside over the next cycle of monetary adjustments. When questioned about whether the Trump administration would accept current Fed Chair Jerome Powell remaining in the post after his term expires in May if the Senate had not yet approved Warsh’s nomination, Bessent replied, "We want Kevin Warsh in as soon as possible."
The comments link three related threads: confidence in a continued decline in core inflation, a call for a reduction in the Fed’s policy rate, and an administration preference for a specific successor to lead the central bank during the coming adjustment period. They also acknowledge uncertainty created by external geopolitical events and by the confirmation process for a new Fed chair.
Readers should note that Bessent framed his position around the expectation that core inflation will fall and that Fed rate cuts are warranted, while also recognizing that policymakers may wait for further data affected by the Iran conflict before acting.
Summary
Scott Bessent said he is quite confident core inflation will continue to decline in the United States despite the Iran war, urged the Federal Reserve to cut rates, said he understands the Fed may wait to see how the war affects the economy, and stated the administration wants Kevin Warsh to assume the Fed chairmanship as soon as possible.