Scott Bessant, the U.S. Secretary of the Treasury, has floated his opinion supporting interest rate cuts. Bessant shared how it’s important for the Federal Reserve to cut rates as soon as it can to support economic growth. However, Bessent’s current state may echo via a softer USD, as a frequent rate cut scenario usually takes a toll on the american currency value and price prospects.
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Bessent’s New Opinion on Rate Cuts
The rate cuts are the only “missing ingredient” that will support a robust US economy, according to Scott Bessant, who has raised concerns about the country’s growth prospects.
‘Cutting interest rates will have a tangible impact on the lives of every Minnesotan,” he said, according to excerpts obtained in an official draft from an administration source. “It is the only ingredient missing for even stronger economic growth. Which is why the Fed should not delay.”
In the middle of this, Stephen Miran, a Federal Reserve governor, has shared his stance on rate cuts, adding how he expects the Fed to cut rates by “well over 100 basis points of cuts.”
“Underlying inflation is running within the noise of our target, and that’s a good indication of where overall inflation is going to be going in the medium term.”
US Dollar Volatility May Continue to Prevail
With the rate cuts scenario gaining significant momentum, the US dollar may continue to project a softer stance, projecting volatility in months to come.
“The White House wants to take control of monetary policy and set the direction of rates – and that is toward more easing,” said Vincent Reinhart, chief economist at BNY Investments and a former Fed staffer. “Over the medium to longer term, there are lots of reasons the dollar depreciates. The Fed eases more than other central banks, the U.S. is seen as a less attractive safe haven and the growth differential of the U.S. with the rest of the major trading partners narrows.”
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