Scott Bessent says the Fed doesn’t have to cut interest rates urgently anymore

Scott Bessent said the Federal Reserve does not need to hurry into rate cuts, even if lower rates may still come later.

Speaking Monday at Semafor World Economy in Washington, DC, the US Treasury Secretary said the war in Iran has added too much uncertainty for the central bank to act fast. Bessent said, “Do I think rates should be lowered? Eventually. I think now that we have to wait and see.”

Scott said the economy looked strong before the shock hit. He said, “But I think as we went into January [and] came out of January and February, the economy was very strong.” That came as Donald Trump kept pushing the Fed to cut borrowing costs. Bessent said the Fed is “doing the right thing by sitting and watching” while the Iran conflict unfolds.

Scott says the Fed should sit tight while oil drives faster inflation

Scott said he does not think the jump in prices will stick in people’s minds. New government data released Friday showed inflation in March rose three times faster than it did in February, helped by higher oil and gas costs.

Inflation excluding food and energy rose less than forecasters expected. He said, “If ever there was ‘Team Transitory,’ it’s this.” He said, “I don’t believe this is going to get embedded into inflation expectations.”

Asked if the war in Iran will be good or bad for the US economy, Scott did not give a verdict. He said, “I think we will look back and say, I don’t know the number of days, whether it’s 50 or 100 or more, for 50 years of stability.”

In February, Scott said he thought the economy could grow more than 4% this year. Asked if he still believed that, he answered, “Obviously, we’re going to have some make-up to do.”

Scott defends Kevin Warsh as wealth filings and Senate politics slow the process

Scott spoke about Kevin Warsh, Trump’s nominee to replace Jerome Powell as Fed chair. Bessent said, “My criterion is who has an open mind.” He said, “With the Fed, you expect a monetary policy board, but you never think there’s this sprawling organization up there.”

Scott added that Kevin plans to review how the reserve banks work. He said, “He’s going to do a serious look at how the reserve banks interact. I think the reserve banks [are] a management disaster, because something like 50% of the people in each reserve bank do not report to the president.”

On Sen. Thom Tillis of North Carolina, who opposes Kevin over the Trump administration’s investigation into Powell, Scott said, “We’ll have to see what Senator Tillis needs to do.”

Financial disclosure forms show Kevin is much richer than recent Fed chairs. His filings list holdings of about $131 million to $209 million, plus hundreds of millions more in assets held by his wife, Jane Lauder. Powell’s filing for 2025 showed wealth between $19 million and $75 million.

Kevin also reported $10 million in income from advising investor Stanley Druckenmiller, a role he has jokingly called his “day job.” He made about $3 million more from Stanford University, where he is a fellow at the Hoover Institution, and several Wall Street firms.

The filings list roughly 1,800 assets. Many are only partly described because of “pre-existing confidentiality obligations,” which kept him from naming the holdings. Kevin said he would divest those assets if confirmed.

Earlier in his career, Kevin served as a Fed governor under Ben Bernanke. When Bernanke left in 2014, his filings showed assets of no more than $2.3 million, mostly in retirement funds. Kevin’s paperwork puts him one step closer to a Senate hearing after a plan for this week was delayed by a paperwork holdup.

The earliest hearing is next week. Tillis, who also sits on the Senate Banking Committee, has said he will block final approval until the federal criminal probe into Powell is resolved, so a full Senate vote is still unclear.