Treasury Secretary Scott Bessent said in a speech that he delivered Thursday the Trump administration is seeking lower interest rates because they are the key to future economic growth.
In the speech before the Economic Club of Minnesota, Bessent supported President Donald Trump’s economic agenda and said easier monetary policy will help pave the way for gains ahead.
“Cutting interest rates will have a tangible impact on the lives of every Minnesotan,” Bessent said. “It is the only ingredient missing for even stronger economic growth. Which is why the Fed should not delay.”
In the final four months of 2025, the Fed approved three consecutive interest rate cuts, totaling 0.75 percentage point and taking its key interest rate down to a range of 3.5%-3.75%.
CNBC reported that the pace of reductions is expected to slow considerably this year, with markets pricing in only two cuts and the most recent projections from Fed officials pointing to just one.
Fed to Get New Chair This Year
One wild card in that equation, however, is that the central bank will get a new chair this year, a process that Bessent is overseeing.
Current Chair Jerome Powell’s term ends in May, and Bessent has reduced the number of candidates to five. National Economic Council leader Kevin Hassett and former Fed Governor Kevin Warsh are the two betting favorites to get the position, CNBC said.
While lower interest rates carry the threat of reigniting inflation, CNBC said that they also could help support a slowing labor market.
“In 2025, the President laid the foundation for robust economic growth with: the historic passage of the One Big Beautiful Bill, trade deals that rewrote decades of global misalignment; and an ambitious deregulation agenda that empowered American entrepreneurs and businesses,” Bessent said. “Now, in 2026, we will reap the rewards of President Trump’s America First agenda.”
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