Bessent: "The benchmark interest rate should be 1.5%p lower than the current level"

"If the Fed had known the May and June employment data, they would have cut rates"

"NVIDIA's 15% payment on China chip exports could be applied to other firms as well"

U.S. Treasury Secretary Scott Bessent argued that the Federal Reserve's benchmark interest rate should be at least 1.5 percentage points lower than it is now.

On the 13th (local time), Treasury Secretary Bessent, in an interview with Bloomberg TV, proposed that the federal funds rate—the Fed's benchmark interest rate—should be 1.5 percentage points below the current range of 4.2% to 4.5%.

He stated, "I think a series of rate cuts could start with a 50 basis point (1bp=0.01%) cut in September." He suggested that "any model would probably indicate a cut of about 150~175bp."

Secretary Bessent emphasized that if Federal Reserve policymakers had been aware of the employment market data released two days after the last Federal Open Market Committee (FOMC) meeting, they might have lowered rates. He said the same could have applied to the June meeting.

On August 1, the Bureau of Labor Statistics released an employment report revising the job increases for May and June to a sharp decrease of 258,000 compared to the initial figures.

The plan for NVIDIA to share 15% of the AI accelerator revenue exported to China with the U.S. government was attributed to an idea from President Donald Trump.

Treasury Secretary Scott Bessent mentioned that the plan requiring companies to pay 15% of their China AI chip sales revenue to the U.S. government was a "unique solution" devised by President Trump.

Bessent said this plan, where the U.S. government collects a portion of company sales revenue, may be used for other cases in the future.

U.S. Treasury Secretaries have been reluctant to comment specifically on Fed interest rates. Secretary Bessent also said he would discuss only past Fed policy decisions for several months and would not comment on future policy decisions. However, President Trump has repeatedly criticized Chair Jerome Powell and urged immediate rate cuts.

Contributing journalist Kim Jung-ah kja@hankyung.com