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U.S. Treasury Secretary Scott Bessent is turning up the pressure on the Federal Reserve to goose the economy by cutting interest rates, and turning into a big voice in the Trump Administration criticizing Federal Reserve Chairman Jerome Powell.
Bessent and the Director of the National Economic Council Kevin Hassett are considered top contenders to take over as Fed chairman when Powell leaves next year.
“Bessent would be very capable,” said financial planner Richard Rosso, “as well as Kevin Hassett but they are all advocates for lower rates. And if you own market investments, then you’ll be very happy.”
Rosso theorized that the administration’s criticism of Powell, as well as rumors about Bessent, Hasset, and others who may possibly replace Powell, are nudges for the Fed to cut rates, but also signals to investors that interest rates will be low under next year’s Fed leadership.
Is Bessent a front-runner for the Fed chairmanship?
Rosso says he has bet a steak dinner that it will be Hasset because of Bessent’s value in his current role but he says the two would be very similar policy-wise.
“There is pressure to make the current administration look better,” Rosso said. “I think that’s always been there. I just think that we’re watching the sausage making right now.Some people are going to disagree with it, but I think, once you go into your 401(K), you realize this has probably always happened.”
Some observers have speculated President Trump may go so far as to name Powell’s replacement months before Powell leaves office in May, just to make it clearer to the markets which way the Fed will go next, but Rosso says it’s no secret what the administration wants, and it certainly hasn’t been a secret in past presidencies.
“They may make a big deal about all the pressure because ‘oh my gosh, that’s never happened before,’” he said.
“I call ‘BS.’ It’s just not been as public but advocates for every White House, they come out and say that they want lower rates. They want the economy to move forward, and they have some pressure.”