U.S. Treasury Secretary Scott Bessent called on the Federal Reserve to consider a 50-basis-point rate cut at its September meeting, citing weaker-than-expected job numbers and softer inflation.
Bessent urges aggressive policy shift
In an interview on Tuesday, Bessent pointed to the Bureau of Labor Statistics revising May and June employment figures downward by a total of 258,000 jobs. He stated:
“If we had the original numbers, we could have been cutting in June and July. I think the real thing now to think about is: Should we get a 50-basis-point rate cut in September?”
The downward revision to jobs data followed July inflation figures showing a 2.7% year-over-year rise, slightly above forecasts but fueling hopes for looser monetary policy.
White House dismisses BLS commissioner
President Donald Trump abruptly removed BLS Commissioner Erika McEntarfer after the initial data release, accusing the agency of manipulating figures to undercut his administration.
Market response
The prospect of a larger rate cut has already energized markets.
Bitcoin and other digital assets rallied. According to crypto fund manager Merkle Tree Capital’s Ryan McMillin:
“A 50 basis point cut would confirm risk on for the rest of the year.”
Options data show investors are still seeking downside protection, with put buying remaining strong ahead of more jobs and inflation numbers due before the Fed’s decision.
