Bessent Signals Fed Facing Pressure for September Rate Cut and Structural Shake-Up

Treasury Secretary Scott Bessent said the Federal Reserve risks staying behind the curve, pointing to weaker labor data and rising political pressure from the White House.

In a televised interview, he stressed that recent revisions from the Bureau of Labor Statistics (BLS) showed softer job growth, making earlier rate cuts plausible. “If we’d had those numbers in May and June, I suspect we could have had cuts in June and July,” he said.

Bessent argued that the Fed’s current stance remains too restrictive. He predicted that the Federal Open Market Committee could move with a 50 basis point rate cut in September, describing monetary policy as 150 to 175 basis points tighter than needed.

He added that any such move would reflect an adjustment rather than a sign of a collapsing economy. President Donald Trump recently renewed criticism of Chairman Jerome Powell, calling him “too late” on rates.

Bessent said Powell remains reluctant to shift direction, contrasting him with former Chair Alan Greenspan, whom he called more forward-looking. According to Bessent, Powell’s emphasis on data dependence risks producing outdated decisions in today’s environment.

The Treasury Secretary also highlighted changes at the central bank’s board. Governor Adriana Kugler’s departure leaves a vacancy, and Bessent suggested the administration will fill seats with private sector figures as well as public officials.

He said Trump intends to reshape the committee’s outlook, with interviews planned for up to a dozen candidates. Beyond monetary policy, Bessent pointed to structural and governance concerns.

He cited cost overruns in Federal Reserve building projects as evidence of weak oversight. He stressed that both he and the president want greater accountability at the institution.

Bessent said Senate Republicans, including Minority Whip John Thune, are expected to back Stephen Murren’s nomination to the Fed board, which could proceed quickly.

He added that further candidates will be announced soon, signaling a broader attempt to remake the Fed’s composition. The remarks underscored the growing intersection of politics and monetary policy.

Investors now watch whether Powell and the FOMC respond to mounting criticism with aggressive cuts, or maintain their stance and risk deepening White House discontent.