Bessent urges Fed not to raise rates amid energy shock
By the AFREEQUE newsroom, based on Al Jazeera
US Treasury Secretary Scott Bessent urged the Federal Reserve not to raise interest rates, citing an energy supply shock linked to the conflict with Iran. Despite this, markets expect a rate increase to 4.00-4.25% at the 9 December meeting, according to CME FedWatch.
US Treasury Secretary Scott Bessent on Friday urged the Federal Reserve not to raise interest rates in response to the energy supply shock linked to the conflict being waged by the United States against Iran. He said the underlying US economy remained strong in an interview with CNBC.
The Fed kept its key interest rate between 3.75% and 4% at its latest meeting. The CME FedWatch tool, which measures monetary policy expectations, put the probability of an increase to 4-4.25% at 89.4% at the next meeting, scheduled for 9 December.
Energy prices had risen by 20.4% year on year in September, according to data cited by Al Jazeera. Meanwhile, the US economy created 165,000 jobs in October, according to the US Department of Labor, strengthening the arguments in favour of a rate increase.
Scott Bessent said he did not want to dictate the Fed’s actions, but that it should remain open to the possibility of not reacting strongly to an energy shock he considers temporary. He recalled that the central bank had made three rate cuts during the same period the previous year.
