Bessent predicts inflation will ease as new Fed chair prepares to take over
The Story
Treasury Secretary Scott Bessent told CNBC on Thursday that he expects “substantial disinflation” in the coming months, just as Kevin Warsh is set to become the new Federal Reserve chair. Recent data showed consumer prices rose 0.6% in April and wholesale prices surged 1.4%, but Bessent attributed the spike to an energy supply shock from the Iran war and said the U.S. will keep pumping oil to ease it. Bessent distinguished the current period from the post-Covid inflation surge, stating that core inflation was declining before the conflict began.
Key Facts
- Treasury Secretary Scott Bessent said he expects “substantial disinflation” ahead, with possibly one or two more “hot inflation numbers” before that occurs.
- Bessent said the recent inflation surge is energy-related and will reverse as the U.S. “going to keep pumping” oil, easing the Iran war supply shock.
- April consumer prices jumped 0.6% monthly overall and 0.4% for core (excluding food and energy). Twelve-month inflation stood at 3.8% overall and 2.8% for core.
- Wholesale prices soared 1.4% in April, putting the 12-month level at 6%, the highest since late 2022.
- Import and export prices also posted their highest levels in about four years.
- Kevin Warsh was confirmed by the Senate on Wednesday and will start as Fed chair after current Chair Jerome Powell’s term ends Friday.
- Bessent said he was “never on team transitory during Covid,” referring to the earlier inflation surge following the pandemic and the Russian invasion of Ukraine.
Conflicting Reports
No conflicting reports identified in the source article.
Still Unclear
No open questions identified in the source article.
Misconceptions
No widespread misconceptions addressed in the source article.
Key Figures
- Scott Bessent (Treasury Secretary)
- Joe Kernen (CNBC interviewer)
- Donald Trump (President of the United States)
- Xi Jinping (Chinese counterpart of President Trump)
- Kevin Warsh (incoming Federal Reserve chair)
- Jerome Powell (outgoing Federal Reserve chair)
