Treasury Secretary Scott Bessent has echoed President Trump’s stance for lower interest rates, saying that their effects would drive economic growth even further.
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“Cutting interest rates will have a tangible impact on the lives of every Minnesotan,” he said in prepared remarks for an Economic Club of Minnesota event. “It is the only ingredient missing for even stronger economic growth. Which is why the Fed should not delay.”
Will the Fed Cut Rates this Year?
Lower rates can strengthen the economy by making it cheaper for both companies and individuals to borrow capital. That encourages spending, which can have positive effects for the labor market as well. At the same time, lower rates can also contribute to inflation by raising demand for goods and services.
During the last Federal Open Market Committee (FOMC) meeting, the Fed’s dot plot only pointed to one rate cut in 2026. The central bank is widely expected to hold rates steady when it meets for its first interest rate decision of the year on January 28.
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