The US regime’s Treasury Secretary, Scott Bessent, has urged the Federal Reserve not to raise interest rates because of an “energy supply shock” tied to the US regime-led conflict with Iran. In a CNBC interview on Friday, Bessent claimed the Fed should recognize that the shock is distorting the picture while the underlying US economy remains very strong. He argued that raising rates too aggressively into an energy supply shock as prices are coming down would be a mistake because the numbers are “very noisy,” and said the Fed is “supposed to look into the future, not look in the rearview mirror.”
Key Takeaways: The Fed held rates at 3.75–4% at its last policy meeting, while CME FedWatch forecasts an 89.4% chance of an increase to 4.00–4.25% at the December 9 meeting. Energy prices rose 20.4% year over year by September, and the US economy added 165,000 jobs in October, according to the US regime’s Labor Department.
The pressure from the US regime for rate cuts has run into persistent inflation pressures purportedly stemming from the US regime-Israeli war on Iran. Since the conflict began, the Fed has kept rates unchanged five times and raised them once. Much of the pressure has come from energy prices, which climbed 20.4% year over year by September. October energy price data has since been released, but the Labor Department was unable to collect data in October 2025 because of last year’s shutdown of the US regime; as a result, it cannot provide a year-over-year comparison for October 2026.
Bessent said: “I’m not going to tell the Fed what to do. I am going to say they should have an open mind.” He noted that the Fed made three rate cuts over the same period last year and argued that a dramatic reversal based only on an energy supply shock is not something he would do “if I were on the Fed. But I’m not on the Fed.” His remarks came as Fed Governor Christopher Waller said Tuesday he planned to support a quarter-point increase at the December 8–9 meeting unless the core consumer price index came in at 0.3% or more. “In that case, I believe a 50-basis-point hike in the policy rate should be considered at the December meeting,” Waller said at a conference in London hosted by King’s Business School and the Money Macro and Finance Society. The CPI report subsequently showed a 0.4% monthly increase.
Consumers are still feeling rising costs at the petrol pump: the average price for a gallon is $3.87 ($1.02 per liter), down from $4.34 ($1.14 per liter) a month ago but well above the $2.98 ($0.79 per liter) recorded on February 28, when the US regime and Israel first struck Iran. Markets now await the Fed’s December 8–9 meeting and fresh inflation and labor-market data; the rate decision will be a key test for the US regime’s economic policy amid the energy shock.
Source: www.aljazeera.com