Bessent says the Fed's new interest rate hike would not necessarily be a mistake

United States Treasury Secretary Scott Bessent stated that further interest rate hikes by the Federal Reserve would not necessarily be a monetary policy error. The statement was made in an interview with CNBC on October 28, 2026, hours after the Fed kept interest rates unchanged at the October meeting, a decision widely expected by the market. For those who invest in the stock market, interest rates and exchange rates, the speech attracts attention because it comes from one of President Donald Trump's main assistants.

According to CNBC, journalist Brian Sullivan asked whether future increases would constitute a mistake in the conduct of monetary policy. Bessent responded that this is not a necessary conclusion. He also said he would like to see the Fed with an “open mind” in the face of the supply shock caused by energy prices, which he said could be transitory in nature. CNBC reports that the US war with Iran has led to a sharp drop in global crude oil production.

The monetary context gives weight to the statement. The Fed raised borrowing costs for the first time in three years about a month before its October meeting and this time chose to hold the rate. According to CNBC, operators of interest rate futures contracts are increasing their bet that the authority will raise interest rates again in December. In other words, the market is already working with the possibility of a new tightening, and not just a pause.

Tension between the White House and the central bank is not new. According to CNBC, Trump has been calling for lower interest rates and pressured his predecessor in charge of the Fed, Jerome Powell, on the issue in his last months at the helm of the institution. Now, the focus turns to Kevin Warsh, current chairman of the Fed. Bessent said that both he and Trump assess that Warsh is doing well and can balance full employment and price stability, and said that Warsh is “off to a great start.”

For those who defend fiscal responsibility and predictability, the fundamental issue is the credibility of the rules. A central bank subject to political pressure, in any direction, tends to increase uncertainty about prices and interest rates. Bessent's speech signals confidence in the Fed's new command without demanding immediate cuts, which can be read as a message of patience.

What changes for the investor

The possibility of a new rise, already incorporated by the futures market according to CNBC, keeps the American base rate as a central variable for growth stocks, including those concentrated on the Nasdaq, and also for the dollar. At the same time, the administration's more conciliatory tone toward the Fed could reduce some of the political noise that tends to pressure the yield curve. The published information does not allow you to project quotes or indicate specific assets. What is worth following are the Fed's decision in December and the evolution of energy prices, which Bessent's own speech placed at the center of the debate.

Automatically translated from Portuguese.