Washington, D.C., August 13, 2025 – US Treasury Secretary Scott Bessent has intensified calls for a substantial reduction in interest rates, urging the Federal Reserve to implement a 50 basis point cut at its September meeting and to consider further reductions through the end of the year.
Bessent’s remarks follow the latest consumer price data showing annual inflation unchanged at 2.7% in July, defying expectations of an uptick. He argued that the Fed’s current benchmark rate—set at 4.25% to 4.5%—should be at least 1.5 percentage points lower.
“We could be entering a series of rate cuts, starting with a half-point in September,” Bessent told Bloomberg Television, adding that recent labor market revisions support earlier easing.
Revised figures from the Bureau of Labor Statistics released on August 1 showed that job growth for May and June was 258,000 fewer than initially reported. Bessent suggested that had policymakers known this earlier, they might have begun rate reductions in June or July.
Market Reaction: Dollar Weakens, Stocks Hit Record Highs
The prospect of aggressive easing sent global equities higher, with the MSCI All Country World Index touching a new record. In the US, the S&P 500 and Nasdaq both closed at all-time highs, while Japan’s Nikkei also set a fresh peak.
The US dollar slipped 0.4% against a basket of currencies, and the British pound climbed to a three-week high amid expectations that UK rates will decline more slowly than in the US.
Analysts note that despite core inflation—excluding food and energy—rising to 3.1%, markets are betting the Fed will prioritize slowing job growth and muted goods prices over stubborn services inflation. Futures markets now imply a 94% probability of a September cut.
Wider Economic Developments
- Export Revenue Model May Expand – Bessent also floated extending the White House’s recent 15% export revenue-sharing agreement with Nvidia and AMD on Chinese sales to other industries.
- Global Oil Supply Outlook – The International Energy Agency expects oil output to grow faster than demand in 2025 and 2026, pressuring prices.
- Corporate Moves – UK healthcare property firm Assura is set to be acquired by Primary Health Properties in a £1.8 billion deal. Rolls-Royce’s CEO said the company’s small modular nuclear reactors for AI data centers could make it the UK’s most valuable firm.
- China Property Crisis – Debt-laden developer Evergrande will be delisted from the Hong Kong Stock Exchange this month, marking a symbolic end to its former dominance.
Political Pressure on the Fed
President Donald Trump has publicly urged the Fed to act faster, even threatening legal action against Chair Jerome Powell—an unprecedented move that legal experts doubt is enforceable.
Some economists, including Professor Costas Milas of the University of Liverpool, believe upcoming PCE inflation data—the Fed’s preferred measure—could drop to 2.3%, increasing the case for a deeper cut.
Related Coverage
- Economy & Market – https://idahonews.co/economy-market/
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