Scott Bessent wants Fed to yield on rates
Scott Bessent
said that the
US Treasury market
is telegraphing that the
Federal Reserve
ought to lower
interest rates
.
"We are seeing that two-year rates are now below Fed funds rates. So that's a market signal that they think the Fed should be cutting," Bessent said in an interview with Fox Business.
Two-year Treasury yields were at 3.57% in early traders, compared with a benchmark
federal funds rate
of 4.33%. The Fed targets the key rate at a range of 4.25% to 4.5%.
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Scott Bessent wants Fed to yield on rates
Two-year Treasury yields were at 3.57% in early traders, compared with a benchmark federal funds rate of 4.33%. The Fed targets the key rate at a range of 4.25% to 4.5%.
RBI's bond purchases set to surpass Covid era levels
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US yields rise after better than expected manufacturing report
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Fed policymakers have suggested that they're not yet ready to resume lowering rates, with inflation still running above their 2% target and given the likely pressure on prices to come from President Donald Trump's tariff hikes. The Fed next decides on rates May 7 when almost all economists predict them to stand pat. Trump has repeatedly criticised Fed Chair Jerome Powell for not cutting rates this year, saying Tuesday that "I have a Fed person who's not really doing a good job."
10-Year Yields
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Despite Trump's continued attention to the Fed's benchmark, Bessent argued that he and the president are focused on 10-year Treasury yields - "targeting that point on the curve." The Treasury chief highlighted that 10-year yields have retreated since Trump took office. They were around 4.15% Thursday, compared with around 4.63% on January 20. National Economic Council Director Kevin Hassett said the drop in 10-year rates is "saving the federal government lots of money" in terms of interest costs.
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