Treasury Secretary Scott Bessent Urges Federal Reserve to Delay Rate Cuts

U.S. Treasury Secretary Scott Bessent advocated for a "wait-and-see" approach to monetary policy, stating the Federal Reserve should delay interest rate cuts until the economic effects of the conflict in Iran and Operation Epic Fury are clearer. Speaking at the Library of Congress and the Semafor World Economy conference in Washington, D.C., Bessent argued that the Federal Reserve is taking the correct course by maintaining rates between 3.50% and 3.75%. This position marks a policy shift for the administration, as President Donald Trump has previously pressured Federal Reserve Chair Jerome Powell to lower rates.

The cautious stance follows economic instability and a March inflation spike of 3.3% caused by the closure of the Strait of Hormuz. While the Islamic Revolutionary Guard Corps promised to reopen the waterway under a ceasefire, Donald Trump reported that 34 ships passed through the strait following a U.S. blockade. Federal Reserve officials indicated that persistent inflation and high oil prices may push the timeline for rate cuts beyond 2026 and potentially into 2027.

Beyond monetary policy, Bessent announced a forthcoming executive order requiring banks to collect customer citizenship information to identify potential ties to foreign terrorist organizations. He also proposed creating a Board of Trade and a Board of Investment to manage U.S.-China trade relations and questioned the reliability of China's rare-earth materials supply.