The Treasury Secretary also called out the Federal Reserve for having “tariff derangement syndrome”, echoing President Trump’s attacks on Fed Chair Jerome Powell.

U.S. Treasury Secretary Scott Bessent testifies before the House Appropriations Committee in the Rayburn House Office Building on May 06, 2025 in Washington, DC.(Photo by Kayla Bartkowski/Getty Images)

Rounak Jain·Stocktwits

Updated Jul 02, 2025 | 8:31 PM GMT-04

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Treasury Secretary Scott Bessent on Wednesday revealed that he expects the Federal Reserve to cut interest rates by September at the very least.

In an interview with Fox News, Bessent said President Donald Trump’s tariffs had resulted in mild inflation only, which could push the central bank to ease monetary policy sooner than later.

"I think that the criteria is that tariffs were not inflationary. If they're going to follow that criteria, I think that they could do it sooner than then, but certainly by September," Bessent said.

The Treasury Secretary also called out the Federal Reserve, echoing President Trump’s attacks on Fed Chair Jerome Powell.

“I guess this tariff derangement syndrome happens even over at the Fed,” he said in a Bloomberg podcast, taking a potshot at the central bank.

Meanwhile, U.S. equities edged up on Wednesday amid a see-saw movement so far.

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.31%, while the Invesco QQQ Trust (QQQ) surged 0.68%. Stocktwits data shows retail sentiment around the S&P 500 ETF has been in the ‘bullish’ territory over the past week.

Bessent has emerged as one of the top contenders to succeed Powell as the Fed Chair in May next year.

According to a report, Bessent’s name has received support from advisors within and outside the Trump administration to lead the Federal Reserve.

Another contender is Kevin Warsh, a former Fed official whom President Trump interviewed for the Treasury Secretary position.

President Trump, meanwhile, has continued to attack Powell publicly. He revealed that he is considering a few candidates to replace Powell as the next Federal Reserve Chair.

“I know within three or four people,” said President Trump while addressing reporters during a press conference in The Hague.

“I mean he goes out pretty soon, fortunately, because I think he’s terrible,” he added.

Trump’s latest criticism of Powell comes after the Fed Chair questioned who would pay for the President’s tariff policies, implying that inflation would heat up eventually.

“The question is, who’s going to pay for the tariffs? How much of it does show up in inflation? And honestly, it’s very hard to predict that in advance,” he said.

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