Bessent Tells Fed to Keep Open Mind on Rates Amid AI Productivity Gains

Treasury Secretary Scott Bessent told the Federal Reserve to keep an open mind on interest rates, citing AI productivity gains and deregulation as factors that are already helping to control inflation.

Bessent made his comments after the Fed raised its benchmark rate for the first time in three years, with 16 of 18 officials predicting at least one more hike before year's end.

The Treasury Secretary argued that AI and deregulation could lift output per worker and enable faster economic growth without generating demand-driven inflation, which would normally require higher interest rates.

Bessent has previously floated this idea, pointing to hyperscalers like Meta and Google, which are investing heavily in AI infrastructure. He believes their investments demonstrate that AI is a real productivity booster, not just speculative.