Bessent Adopts Trump’s Rhetoric? Within a Day: "Supports Powell, No Need for Resignation"

Although he criticized the Federal Reserve in an interview the previous day, he expressed "support for Powell" within just one day

"The August 12 China tariff truce deadline will be extended"

Warnings also issued to countries importing Russian and Iranian oil

Scott Bessent, who has emerged as the most trusted cabinet member in the early phase of President Donald Trump’s second term, is increasingly resembling Trump’s style of often reversing statements.

Just a day after sharply criticizing the Federal Reserve in an interview with CNBC, Treasury Secretary Bessent stated in an interview with Fox Business on the 22nd (local time) that “Chair Jerome Powell does not currently need to resign.”

He also added, “I support Federal Reserve Board Chair Powell,” and noted that the achievements of the Fed Chair should be in adjusting the central bank’s non-monetary policy functions to an appropriate scale. He mentioned that if Powell wishes, he should remain in the position until his term ends in May.

Following Bessent’s comments, U.S. government bond yields stabilized, with the 2-year Treasury yield dropping 2 basis points (1bp=0.01%) and the 10-year falling by 3bp.

Meanwhile, Bessent announced plans to meet with China’s Minister of Finance next week to discuss extending the deadline for tariff increases, which is scheduled for August 12. He said current trade with China is “very positive” and that the Stockholm meeting will be held next Monday and Tuesday.

Bessent remarked, “We believe that we have entered a new stage with China,” and added that since trade has settled at a very constructive and good level, much can be achieved.

The previous tariff truce meetings focused on resuming the flow of China’s rare earth metals and America’s semiconductor software and materials. Bessent said the Stockholm meeting will also address issues such as China’s overproduction in manufacturing and its excessive reliance on exports. He expressed hope that China would show efforts to reduce manufacturing overcapacity and focus on building a consumer-driven economy.

He also stated that he would like to warn about China’s continued purchase of Russian and Iranian oil under sanctions and about Russia’s support for the war in Ukraine.

Bessent noted that there was bipartisan support in the U.S. Senate for imposing a 100% tariff on goods from China, India, and other nations that continue buying Russian oil. He commented, “It will be important for European nations, which have shown strong interest in Russian sanctions, to also agree to high-level secondary tariffs on Russian oil.”

He said the U.S. is ready to announce “a series of trade agreements,” and that Japan, coping with the ruling party’s election loss and tough negotiations, is unlikely to resolve the issues quickly.

Kim Jeong-a, Contributing Reporter kja@hankyung.com