Bessent says Fed should 'wait and see' before lowering rates, Semafor reports

• The war in Iran has driven crude oil prices up more than 30%, pushing U.S. gasoline prices above $4 per gallon for the first time in over three years
• U.S. consumer prices have risen due to record surges in gasoline and diesel costs, negatively impacting President Trump's approval ratings over economic concerns
• Bessent suggested the conflict could bring '50 years of stability' and noted European and Asian countries are subsidizing demand while the U.S. has not

Summary: Bessent Advises Fed to Hold Rates Amid Iran Conflict

U.S. Treasury Secretary Scott Bessent recommended the Federal Reserve adopt a "wait and see" approach before lowering interest rates as the war in Iran continues to impact global markets. Speaking to Semafor on Monday, April 13, Bessent noted the U.S. economy was "very strong" in January and February and endorsed the Fed's current stance of monitoring developments.

Key Market Impact:

The Iran conflict has triggered significant economic disruptions:

• Global crude oil prices have surged over 30%
• U.S. retail gasoline prices exceeded $4 per gallon for the first time in three years
• U.S. consumer prices rose sharply due to record increases in gasoline and diesel costs

Policy Outlook:

Bessent expressed confidence that recent price spikes won't become embedded in long-term inflation expectations. He also stated he would be "shocked" if the European Central Bank raised rates, noting that many European, UK, and Asian countries are subsidizing demand—measures the U.S. has not implemented.

Political Implications:

The economic strain from higher fuel costs has negatively affected President Donald Trump's approval ratings, with growing public discontent over his economic management.

Long-term Perspective:

Despite near-term challenges, Bessent suggested the conflict could ultimately yield positive results, stating the current disruption might lead to "50 years of stability," though he didn't specify a timeline for resolution (estimating 50-100+ days).

The Treasury Secretary's comments signal that monetary policy will likely remain on hold as policymakers assess the conflict's economic ramifications and inflation trajectory.