US Treasury Secretary Bessent says he understand if the Fed needs to wait on rate cuts; eventually Fed will cut more
Importance
Level 1
WAR
- Markets are discounting that the war will end.
FED
- Would be ready to cut rates, have an open mind to more cuts since the Fed waited longer.
- Doesn't know if Warsh will be confirmed by May 16th.
- Hopes everyone works to have Warsh at the Fed in May.
PRICES
- Notes of a downward trend in core inflation.
- Confident fertiliser prices will come down.
- Gasoline prices will start coming down quickly.
- Warns gasoline stations to be good actors on prices.
- Markets say there have been no transfers from oil prices to inflation expectations.
GROWTH
- This quarter will be slower than it was.
- Micro data points on the economy have been great.
PRIVATE CREDIT
- Keeping track of private credit.
- Wants to avoid regulatory arbitrage.
- Treasury sees no systemic risk in private credit.
CHINA
- Great stability in the China relationship.
- On track for a mid-May meeting with China.