Treasury Secretary Scott Bessent said he expects the Federal Reserve to cut interest rates by September, and that President Donald Trump's trade tariffs were unlikely to stoke inflation as feared by the central bank.

Speaking on Fox News' Ingraham Angle, Bessent said it was "bewildering" to him that the Fed had not cut interest rates in the face of President Donald Trump's trade tariffs, especially given that the central bank lowered its growth forecast.

"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.

"I don't agree with their criteria, but if you're following the criteria, sure, why not fall."

Bessent's September forecast comes just hours after Goldman Sachs predicted that the Fed's first cut will come in September, followed by two more cuts later in the year.

The central bank has struck a largely cautious stance towards future monetary easing, citing uncertainty over the inflationary effects of Trump's trade tariffs. Fed Chair Powell reiterated this stance during an event in Portugal on Tuesday.

PCE price index data, the Fed's preferred inflation gauge, showed price pressures increased in May and remained above the Fed's 2% annual target.

Trump has repeatedly called on Powell to cut interest rates further, with media reports showing that the president also plans to name Powell's successor earlier to undermine the Fed chair.

When asked about Elon Musk, Bessent said "if Elon sticks to rockets, I'll stick to finance," dismissing the Tesla (NASDAQ:TSLA) CEO's criticism of Trump's "big beautiful bill."

Bessent downplayed concerns over high government debt levels, stating that he was "confident" the bill will bring down debt levels, and that the legislation will be passed through Congress.

Source: Investing.com