Bessent Urges Fed to Keep Open Mind on Interest Rates Amid AI-Driven Gains

Treasury Secretary Scott Bessent recently urged the Federal Reserve to keep an open mind when considering interest rate adjustments. This comes as AI-driven productivity gains and deregulation have contributed to contained inflation, he argued.

In a conversation with Larry Kudlow on Fox News' Sunday Morning Futures, Bessent drew parallels between current economic conditions and those during the Greenspan era. He suggested that just as productivity tied to the internet led the Fed to 'let things run,' today's AI-driven gains are similarly significant.

The Treasury Secretary attributed some of these gains to deregulation efforts, which he believes have expanded supply quickly enough to absorb private-sector demand shocks. Bessent also stated that Federal Reserve Chair Kevin Warsh is well aware of the productivity gains.