Bessent backs Fed caution on rate cuts, pushes Warsh confirmation
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- Scott Bessent said he could understand if U.S. central bankers wanted to observe economic developments related to the war before cutting rates.
- Bessent said it made sense for Donald Trump's nominee as Fed chair, Kevin Warsh, to lead the next cycle of monetary adjustments.
- When asked if the Trump administration would accept current Fed Chair Jerome Powell staying past the end of his term in May if Warsh's nomination was not yet approved by the Senate, Bessent replied, 'We want Kevin Warsh in as soon as possible.'
- Powell's term as Fed chair ends in May, making Senate confirmation of Warsh the key deadline for the transition.
- Bessent framed deference to the Fed's caution on war-driven uncertainty alongside a clear push to install Warsh, signaling the administration's preference for a new chair even as it accepts a possible pause in cuts.
Why it matters: Bessent's comments set up a two-track pressure point: the administration accepts the Fed may hold off on rate cuts while war-related uncertainty persists, but it is simultaneously racing to replace Jerome Powell with Kevin Warsh before Powell's term ends in May, making Senate confirmation timing the decisive variable for who sets U.S. monetary policy next.
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