Treasury Secretary Scott Bessent told the Federal Reserve that current inflation figures are being distorted by temporary energy costs, urging the central bank to avoid excessive interest rate increases. Bessent characterized the current inflation as a “noisy number” resulting from an energy supply shock caused by Iran, adding that core inflation remains under control and the U.S. will eventually recover from the disruption.
The caution comes as Bank of America forecasts that the Fed will raise rates at each of its next 3 meetings, stating that the central bank appears too far “behind the curve” on inflation. However, global “landed” oil prices at refinery gates have already declined 35-40% from their peak on Sept 15.
