On August 14, Jin10 reported that U.S. Treasury Secretary Basent stated that he is not asking the Fed to carry out a series of interest rate cuts, but merely pointed out that models show the "neutral" interest rate will be about 1.5 percentage points lower than it is now. Basent said: "I did not tell the Fed what to do." He was referring to comments the previous day about the Fed "being able to start a series of rate cuts." Basent said on Thursday: "What I am saying is that to reach the neutral interest rate, about 150 basis points of cuts are needed. If one believes in the existence of a neutral interest rate, I think there is room for a series of rate cuts, but I am not calling for rate cuts, nor have I done so. I am just saying that the model estimates the neutral interest rate is about 150 basis points lower than the current level."
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Bescent: It's not urging the Fed to cut interest rates, but rather citing model results.
On August 14, Jin10 reported that U.S. Treasury Secretary Basent stated that he is not asking the Fed to carry out a series of interest rate cuts, but merely pointed out that models show the "neutral" interest rate will be about 1.5 percentage points lower than it is now. Basent said: "I did not tell the Fed what to do." He was referring to comments the previous day about the Fed "being able to start a series of rate cuts." Basent said on Thursday: "What I am saying is that to reach the neutral interest rate, about 150 basis points of cuts are needed. If one believes in the existence of a neutral interest rate, I think there is room for a series of rate cuts, but I am not calling for rate cuts, nor have I done so. I am just saying that the model estimates the neutral interest rate is about 150 basis points lower than the current level."