Key facts
- Bessent said the Fed should have an open mind and not hike because of an energy supply shock tied to the Iran war.
- Bessent said the underlying US economy is very strong and the energy shock numbers are noisy.
- Bessent said he would not reverse last year's three rate cuts in a dramatic way if he were on the Fed.
- Fed Chairman Kevin Warsh said last month policymakers would watch data to decide on further tightening.
US Treasury Secretary Scott Bessent said on November 13, 2026 that the Federal Reserve should have an open mind and not raise interest rates because of an energy supply shock tied to the Iran war. In an interview on CNBC, Bessent said the underlying US economy is very strong and that the energy shock numbers are noisy.
"I think the Fed should understand that this is an energy supply shock," Bessent said. He added that the Fed is supposed to look into the future, not look in the rearview mirror.
Bessent said he would not tell the Fed what to do but that it should have an open mind. He noted the Fed did three rate cuts over the same period last year and said reversing them in a dramatic way based on an energy supply shock is not something he would do if he were on the Fed.
The Federal Reserve left its policy rate on hold last month, with Fed Chairman Kevin Warsh saying policymakers would be watching for data to help decide whether more monetary policy tightening would be needed. A stronger-than-expected US jobs report last week bolstered the case for further rate hikes, which had lost some momentum amid a post-election stock market selloff and growing fears that weaker AI-driven demand could undercut the economy.