Watch as Scott Bessent educates NBC News’ Kristen Welker about how Fed sets interest rates

Treasury Secretary Scott Bessent explained to “Meet the Press” host Kristen Welker on Sunday how the Federal Reserve sets interest rates.

Federal Reserve Chairman Jerome Powell signaled on Aug. 22 that the central bank could potentially cut interest rates soon, months after President Donald Trump called for Powell to lower them. Discussing the previous firing of Federal Reserve Governor Lisa Cook and pressure on Powell to lower rates, Welker asked Bessent if the Fed Chair “sets” interest rates or Trump.

“The Fed Chair doesn’t set interest rates, the FOMC sets interest rates, so it is a board — ” Bessent said before Welker jumped in.

Welker then asked Bessent again if he believes Trump should “have a say” in setting interest rate cuts.

“President Trump is going to make his views known just like President Biden did. President Biden in the State of the Union, his last State of the Union, said he thought there was going to be an interest rate cut,” Bessent responded. “Senator Warren called for a 75 basis point interest rate cut this time this year.”

WATCH:

In March 2024, former President Joe Biden predicted the Fed would lower its interest rates soon, later applauding the central bank for the cuts and calling them a “declaration of progress.”

Tensions between Trump and the Federal Reserve had increased over the months, as Trump has repeatedly called for Powell to lower interest rates. Since Trump’s announcement of sweeping reciprocal tariffs against a handful of countries, Powell has voiced concerns about the uncertainty they could cause. On July 1, Powell told a panel that the central bank would have lowered rates by now if Trump had not imposed the tariffs.

By July, Republican Florida Rep. Anna Paulina Luna said on X that she was referring Powell to the Department of Justice (DOJ) to investigate alleged perjury related to the Fed’s more than $2 billion headquarters renovation project.

Despite tensions between Powell and Trump, the president said in a Newsmax interview that he is not removing Powell from his position, claiming it would “disturb the market.” However, on Aug. 25, Trump announced the removal of Cook, alleging she signed documents claiming residency in two different states.

While Cook has sued the Trump administration over her termination, the DOJ launched a mortgage fraud investigation into the former Fed governor on Thursday.

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