United States, August 2025 — U.S. Treasury Secretary Scott Bessent has urged the Federal Reserve to consider a half-percentage-point interest rate cut at its September policy meeting, signaling a sharp shift toward aggressive economic stimulus.
Economic Data Driving the Call
Bessent’s proposal follows recent labor market revisions showing weaker-than-expected job growth in May and June. He argued that the economy is sending clear signs of cooling, with inflation holding steady, and that the Fed’s current policy stance is overly restrictive. He suggested that rates should ultimately be lowered by 150 to 175 basis points to support sustained growth.
Potential Board Shift
The Treasury chief also expressed optimism that Stephen Miran, a nominee for the Federal Reserve Board, could be confirmed before the September meeting. If seated in time, Miran’s presence could strengthen support for a more substantial rate cut.
Markets React with Optimism
Following Bessent’s comments, stock markets surged to record highs, the U.S. dollar slipped, and gold prices rose. Analysts say the moves reflect growing investor confidence that a major policy shift is coming, with futures markets now heavily favoring a September rate cut.
Diverging Views Within the Fed
While some Fed officials have adopted a more dovish tone, others remain cautious. Atlanta Fed President Raphael Bostic, for example, has projected only one rate cut this year, citing persistent risks of inflation, especially from trade-related pressures.
What It Could Mean for the Economy
A half-point cut would make borrowing cheaper for households and businesses, potentially boosting spending, investment, and housing activity. However, critics warn that moving too quickly could reignite inflationary pressures if the economy proves more resilient than expected.
The final decision will depend on upcoming data releases on inflation, employment, and consumer demand, all of which will be closely watched in the lead-up to the Fed’s September meeting.
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