Treasury Secretary Bessent says Fed has been behind the curve

Investing.com -- Treasury Secretary Scott Bessent stated Tuesday that the Federal Reserve has been "behind the curve" during an interview on CNBC.

Bessent noted that a 25 basis point interest rate cut is already "priced-in" by markets, adding that "the market is pricing 75 basis points between now and year-end." He indicated that the key question is whether the Fed will aim for a neutral or accommodative stance.

The Treasury Secretary pointed out that "the very front end of the curve is inverted," suggesting market expectations for monetary policy easing.

Regarding his recent meeting with former St. Louis Federal Reserve President James Bullard, Bessent described it as "a very good session," noting that Bullard "knows the institution of the Fed very well."

On trade matters, Bessent stated that tariffs "will help us pay down the debt" and mentioned that the administration has "lots of authorities we can use on tariffs."

Addressing U.S.-China relations, Bessent expressed that he expects Presidents Trump and Xi "will agree on a final deal" regarding TikTok. He also revealed that the U.S. "expressed disappointment on Nvidia to Chinese" officials, though he claimed the Nvidia news "didn’t impact talks with China."

Bessent indicated that another meeting with Chinese officials is needed before November 10, with the next meeting scheduled to take place in Frankfurt.

On the labor market, Bessent characterized it as being "in balance."

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