Treasury Secretary Bessent Urges Fed to Keep Open Mind on Rates Citing AI

Treasury Secretary Scott Bessent has urged the Federal Reserve to maintain an open mind and flexible approach on interest rates, arguing that AI-driven productivity gains and deregulation will permit non-inflationary growth. The remarks follow the Fed's first benchmark interest rate increase since 2023, prompted by core consumer prices rising 0.3% month-over-month in August and 2.4% annually amid elevated fuel costs from the Iran conflict. Bessent compared the situation to Alan Greenspan's 1990s policy and urged Fed Chair Kevin Warsh to take a similar stance, describing underlying core inflation as quiescent.