Bessent Says Fed Should Focus on Outlook as Energy Shock Fades

U.S. Treasury Secretary Scott Bessent said Friday the Federal Reserve should weigh the outlook as an energy supply shock fades, warning that an overly aggressive rate increase would be inappropriate.

Bessent said the Fed should understand the disruption as a supply shock and stay open-minded rather than change course because of it. He described markets as resilient, citing strong Treasury auctions and demand for the dollar. He said the economy was in very good shape and showed no warning signs, and characterized four recent Treasury auctions as the strongest in 20 years.

On Oct. 28, Fed officials were divided over whether financial conditions were tight enough. Bessent’s view also echoes his earlier comments on the energy shock, when he said core inflation remained under control as the shock neared an end.

Bessent said data next week could be moderate as gasoline prices fall.