US Treasury Secretary Bessent Calls on Fed for Growth and Open-Mindedness
Highlighting the strength of the US economy despite high energy prices, Bessent urged the Fed to pave the way for growth, much like it did during the Greenspan era.
US Treasury Secretary Bessent stated that the US economy remains strong despite high fuel prices and called on the Fed to allow room for growth and be open-minded, echoing the era of Alan Greenspan.
Economic Outlook and Strong Momentum
Bessent argued that despite high fuel prices caused by the conflict with Iran, the US economy is performing strongly, supported by tax cuts and deregulation during the Trump administration.
Fed Policies and the Greenspan Era
Bessent stated that Kevin Warsh, Trump's pick for Fed chair, is aware of productivity gains in the economy similar to the 1990s dot-com boom. Recalling that former Fed Chair Alan Greenspan allowed room for economic growth, Bessent emphasized that current officials should act similarly.
Inflation and Energy Markets
This year, inflation has been affected by record gasoline and diesel prices linked to the Iran war and Ukraine's attacks on Russia's energy sector. Consumer prices in the US, excluding food and energy, increased by 0.3 percent monthly and 2.4 percent annually in August. Bessent noted that core inflation has remained calm and declined over the past few months.
China and Iranian Oil Shipments
Touching upon China's role in the Iran war, Bessent stated he expects Iranian oil shipments to China to stop soon. He conveyed that China has significantly reduced its support to Iran and that there are approximately 15 million barrels of Iranian oil currently at sea heading toward China.
Pressure on Tehran
Bessent said that Iran could make its final oil delivery to China within the next two weeks, which would increase pressure on Tehran to reach an agreement regarding the Strait of Hormuz.