Home / Business and Economy / Treasury Secretary Forecasts 50 Basis Point Fed Rate Cut in September
Treasury Secretary Forecasts 50 Basis Point Fed Rate Cut in September
15 Aug
Summary
- Investors expect Fed to deliver 50 basis point rate cut in September
- Treasury Secretary sees "very good chance" of 50 basis point cut
- Recent payroll revisions suggest rates remain too restrictive
As of August 15th, 2025, investors have begun to anticipate the possibility of the Federal Reserve delivering a jumbo rate cut of 50 basis points in September, similar to the one implemented almost a year ago. This view has been bolstered by July's disappointing jobs report, as well as comments from Treasury Secretary Scott Bessent, who stated during a Bloomberg TV interview that he sees a "very good chance" the Fed will opt for a 50 basis point rate cut in September.
Bessent pointed to significant revisions to jobs data for May and June, which showed far fewer jobs created than initially reported, as evidence that rates remain too restrictive. He advocated for the Fed's short-term policy rate to be slashed by 150 to 175 basis points. Robert Tipp, chief investment strategist at PGIM Fixed Income, also noted that the July jobs report's revisions to a full quarter of labor-market data lower led him to believe a 50 basis point cut could be on the table.
However, some experts believe the Fed may tread carefully, especially with Chair Jerome Powell set to deliver a closely watched speech at the Jackson Hole economic summit next week. There is also additional economic data to be released before the Fed's September meeting, which could influence the central bank's policy decisions.
