Bessent Urges 150 bps Fed Rate Cut
- Scott Bessent advocates 150 bps Fed rate cut amid weak jobs data.
- Market leans towards less aggressive cuts.
- Fed leadership shows hesitation towards drastic rate reductions.
U.S. Treasury Secretary Scott Bessent calls for a 150 basis point Federal Reserve rate cut by year-end, citing weak employment data as justification.
Bessent’s proposal for aggressive rate cuts highlights economic uncertainty, potentially influencing cryptocurrency markets and illustrating divided Federal Reserve leadership on monetary policy decisions.
U.S. Treasury Secretary Scott Bessent has called for the Federal Reserve to cut its benchmark rate by 150 basis points by the end of the year, citing worsening jobs data and slow payroll growth. Bessent remarked, “I believe the Fed funds rate should fall 150–175 bps from the current 4.25%–4.5%, suggesting a more dramatic cut than markets expect.” – Fast Bull
While some Federal Reserve officials hesitate on large cuts, Bessent suggests target rates dropping 150-175 bps from the current 4.25%–4.5% range. This proposal surpasses market expectations.
Potential market impacts include increased liquidity flow into Ethereum, Bitcoin, and other altcoins, which historically benefit from looser monetary policy. This could spur activity in decentralized finance platforms.
If implemented, larger rate cuts could significantly affect financial markets, potentially enhancing risk asset values. The CME FedWatch indicates a 6% chance for a 50 bps cut, reflecting caution in markets.
Historically, large-rate cuts, such as during COVID-19, expanded DeFi total value locked, boosting assets like ETH and BTC.
Future rate policy changes could influence cryptocurrency markets, potentially triggering increased decentralized finance protocol involvement and stablecoin issuance. However, Fed leadership appears divided on such measures.
