Global
US Treasury Secretary Scott Bessent has urged the Federal Reserve to exercise caution in addressing the repercussions of the energy shock caused by the conflict with Iran. He emphasized the importance of avoiding excessive interest rate hikes as the shock subsides, warning that an overly aggressive monetary response could lead to a misreading of economic data. In an interview with CNBC, Bessent explained that Iran triggered a shock in energy markets but expressed confidence in the US economy's ability to overcome these effects due to its strong fundamentals. He noted that the current crisis stems from a supply-side energy shock rather than permanent economic imbalances, stressing that an exaggerated rate increase amid easing shock conditions could result in inappropriate monetary decisions. Bessent also anticipated positive inflation data in the coming week, driven by falling gasoline prices, and stated that he does not see a need to change the Federal Reserve's monetary policy path in response to a temporary disruption in energy supplies.
