Treasury Secretary Scott Bessent cites “Team Transitory” in inflation remarks to Semafor.
US Should Wait to Cut
In an on-stage interview with Semafor, Bessent said US should ‘wait and see’ before lowering interest rates
The Federal Reserve should “wait and see” before deciding whether to lower interest rates amid the war in Iran, US Treasury Secretary Scott Bessent said Monday at Semafor World Economy in Washington, DC.
“Do I think rates should be lowered? Eventually. I think now that we have to wait and see,” Bessent told Semafor Editor-in-Chief Ben Smith. “But I think as we went into January [and] came out of January and February — the economy was very strong.”
Bessent said he’s confident recent price increases won’t permanently alter how consumers view the economy. The US government said Friday that inflation rose three times faster in March than it did in February amid surging oil and gas costs. Inflation excluding food and energy, however, rose slightly less than forecasters had anticipated.
“If ever there was ‘Team Transitory,’ it’s this,” Bessent said. “I don’t believe this is going to get embedded into inflation expectations.”
Asked whether the war in Iran would wind up being good or bad for the US economy, Bessent said: “I think we will look back and say — I don’t know the number of days, whether it’s 50 or 100 or more — for 50 years of stability.”
Bessent also said he thought in February that the economy would have grown more than 4% this year. Asked whether he still thought that, he said: “Obviously, we’re going to have some make-up to do.” “In theory [yes], even though we have a big catch-up,” Bessent added.
Reflections on “Wait and See”
Trump will not be pleased with Bessent’s “wait and see” idea.
Expect clarification soon. Obviously, Bessent did not say what he said.
Meanwhile, with Trump making economic mistake after mistake, what needs a “wait and see” is the “Team Transitory” idea.
Reflections on Expectations
Consumers expectations are 4.8 percent inflation a year from now.
Expectations are 3.4 percent five years from now.
Do those expectations fit Bessent’s statement “I don’t believe this is going to get embedded into inflation expectations.”
I think we need new definitions of embedded and transitory.
Don’t worry. New definitions and explanations are surely coming.
I have a suggestion. Scott, please give former Fed Chair Janet Yellen a call. She can help.
ZeroHedge and I have related ideas.
Don’t Worry It’s Transitory
Q: Transitory to What?
A: That’s what you should be worried about. Either higher inflation, or a recession, or both.
Meanwhile, let’s wait for further clarity. I expect quite a bit more clarity in the coming months one way or another.
I remain open to the idea that a recession will dampen demand so much that the rate of inflation does decline.
Then we will be discussing Bessent’s strong economy idea.
“Obviously, we’re going to have some make-up to do.” “In theory [yes], even though we have a big catch-up.”
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Inflation Expectations Percent
- One Year Ahead: 4.8 percent
- One Year Ahead 3-Month Moving Average: 4.0 percent
- Five Year Ahead: 3.4 percent
- Five Year Ahead 3-Month Moving Average: 3.3 percent
The Fed’s target is 2.0 percent.
Bessent need to read the definition of “Transitory”…
“The Fed needs to start printing no matter what happens in Iran to bail out the private credit players and the banks that funded them. If the global economy fractures and inflation hits hard, the Fed will have no choice but to cut rates and print money to support the banks regardless of the inflation that will result. Gold will sniff it out first.”
the last paragraph from: Myrmikan_Research_2026_04_13.pdf
If true and it probably is as the fed’s primary responsibility is to take care of it bankster owners, Bessent is not squaring with the American public. The article is a six page missive that I thought was well thought out, albeit some thinking not coincident with my own thoughts.
I find it hard to justify anything but serious inflation going forward irrespective of what happens on the demand supply side of price discovery as that is not part of the definition of inflation.
The market can stay irrational for longer than you as an investor can stay solvent.
This inflation can stay “transitory” for far longer than consumers can continue to consume.
Bessent’s wait and see statement implies he truly believes (knows) the Fed is going to raise rates. But after 5 years of allowing above average inflation Team Fed needs to protect its legacy a little better than saying, “Pay no attention to that man behind the curtain”. So it says, “Pay attention to the effect of tariffs and oil price shocks by Trump.”
Inflation is how massive debt gets shrunk to a more manageable level.
Sorta like saying “The solution to pollution is dilution”.
The solution to poisonous debt is dilution of the currency.
If interest rates rise because of inflation, we can’t “inflate away” he debt.
The Fed will cut rates if there’s a stock market crash or other “crisis”. Also, real interest rates were negative from 2020-2022 and high inflation was obvious by mid 2021 but they still managed to keep rates low.
The Fed can only cut short term rates and can’t force anyone to buy T-bills.
The Fed can buy all the T-bills.
This is why I have no debt. I prefer having hard assets that appreciate. Our governments proclivity for adding massive amounts of paper to the inflation fires is ON! The interest rates they pay simply do not cover the amount of risk at this stage of the game.
Productive land, waterfront rentals, rare and desirable sports cars and select stonks are my solutions to the inflation dilemma.
Owning a farm is a far different business than I originally thought it was… Most of my farming peers do not quite get the advantages.
The world as everyone knows it is going to end in 20 years or so when the AI takes over,abolish economics as we know it now, takes all weapons away from humans, erases country borders, eliminates all governments and leaders, elected or otherwise and abolishes concepts like money.
Don’t worry, be happy!
Take your meds. Maybe after another eye-rolling nonsensical tweet about the Iran war. Wouldn’t want to disappoint us.
Don’t be too sure of that.
Especially with reckless fiscal policy.
Inflation to reduce debt is a gimmick that does not work. Correct, the debt total value has less purchasing power, but if the debt is still growing in dollar terms, in other words, there is a deficit, then the problem is not being solved. The only way to solve a debt problem is to pay down the debt. The undesired consequence of trying to inflate away debt is new and refinanced portions will be at higher interest rates as lenders will want compensation for their lost purchasing power and all accounts denominated in dollars also lose purchasing power.
Or….repudiate (i.e. cancel) the debt. People always forget that one.
the U.S. Constitution does not give the federal government any power to cancel, repudiate, or void its own lawful debt.
In fact, the Constitution does the opposite: it protects the validity of federal debt and prohibits questioning it.
Excerpt from a much longer Copilot response
Bessent is an ass but in this case he is probably right. Do you raise rates to head off inflation or lower rates to head off a recession.
Doing nothing is probably 50% incorrect but it is better than doing the wrong thing and being 100% incorrect and exacerbating the problem.
We have supply-driven reserves vs. demand-driven liquidity. Were the only central bank that uses RMPs.
The whole ample reserves framework is accommodative.
We dare not have a recession. Bank credit expansion proceeds relentlessly.
Yellen’s favorite word was “transitory”. She lied by implying price increases were temporary and they’d go back down after “supply chain issues” were resolved, ignoring the trillions of new dollars created that were actually causing the inflation.
Likewise, the current incoming (hasn’t even started yet) inflation will not be transitory. Oil and natural gas from the Middle East will forever be permanently higher because of all the infrastructure damage that has been done in just 1 month. Multi-year repairs, higher cargo insurance rates, and on and on. No more cheap energy.
We’ll need more dollars to meet the higher price levels, so expect even more federal deficit spending and possible “gas rebate” free money checks to be handed out in the US. Ireland just passed a $500 million euro stimulus in response to higher diesel prices. Inflation is coming.
What is SOOOOO continuously IRRITATING and MADDENING: The absolutely BULLSHIT CPI numbers that have NO connection to the realities that we know are TRUE: INFLATION IS OVER 10%.
John Williams of Shadowstats joins the chat….
I sure wish economic stupidity were transitory amongst those in charge. Good Grief!!!!!
^^^^^^^^^^^THIS!
If inflation is transitory, why is gold trading within a strong upward channel since mid 2023 with the exception of the overbought period ending with the commencement of Trump’s war? Probably inflation is currently secular, not cyclical nor transitory. Gold is in the middle of that channel as I type.
Inflation is transitory . . . So is the DOLLAR . . .
The whole year over year rate of change reporting is BS. (In a rate, time period matters so transitory is a wiggle word)
They should just report the Price Level change from the beginning of the decade
But of course obfuscation is the game because you can fool 80% of the people most of the time and the other 20% are benefiting
You left out the slice of the Population that IS aware this is all bullshit. That we be US!
Bessent should simply never speak, he spends too many of his precious words making his team and his King look terrible:
“I think as we went into January [and] came out of January and February — the economy was very strong.”
If ever there is an admission that Trump’s War of Choice murdered our economy, it’s this, from the Treasury Servant no less!
I don’t give a flip about “expectations”, I only care if it gets embedded into actual prices…which in nearly all cases it does. I wish they’d stop using expectations in their conversation because all that matters is actual prices paid whether they were expected or not! In fact they have never expected a recession yet we’ve had many and didn’t expect the transitory prices actually weren’t. How do these financial boobs get their jobs and why do we quote them. I guess AI can’t fill certain positions fast enough–Secretarys of Treasury and Fed Chairs being the first. No “expectation” of being qualified, competent or correct.
Exactly.
I have discussed this point countless times.
My bottom line conclusion is: It’s a good thing right now that inflation expectations don’t matter at all
Well, you can wait for 365 days to see what the YoY inflation rate ends up being – if that’s what you want to do.
But many out there want to make market decisions over the next year. And inflation expectations is one data point to see what others are estimating about inflation and so making their market decisions which might affect our decisions.
You can avoid those inflation expectations reports, if they upset you that much
This is precisely why these goobs have these jobs. To peddle nonsense under which the government and central bank can continue this crap. No way “Nobel economist” Paul Krugman deserved that prize. It was to give his court jester ass some cred so.he could peddle nonsense. He either believes his own bullshit, in which case he is a most useful idiot, and/or they got dirt on him that they hold over him so he can never take the court jester costume off.
“I remain open to the idea that a recession will dampen demand so much that the rate of inflation does decline.”
That might be the forward path, but I doubt the fed or congress will let it play out without massive counter stimulus, after all, politicians can’t have disappointed voters. We are past the point of stimulus efficacy as last fiscal year, $1.8 trillion in stimulus (deficit) bought $0.8 trillion GDP growth (mostly government and healthcare). That stimulus is now part of the contribution to the “permanent” stimulus as Janet should have called it. After all, ineffective stimulus is probably transitory.
What a mess!
GDP increased by $1.6T over the last year from 2024 Q4 to 2025 Q4
You are right, the numbers I used I pulled from Copilot.
1.6 is still less than 1.8 in borrowing, the premise stands.
I seem to remember Yellen saying the same thing. And here we are.
Transitory to the Consumer(s)
The last time inflation was transitory it lasted 5 years.
There may be a demand collapse though, Asia and European airlines are running out of jet fuel in a few weeks. Once that happens bankruptcy dominos start to fall all over the world.
https://www.reuters.com/world/asia-pacific/qantas-lifts-fuel-cost-forecast-middle-east-war-jolts-oil-markets-2026-04-13/
The Straits of Hormuz still closed so not sure how that gets sorted out at all. Kiss those summer vacations to Europe or Asia goodbye or be prepared to pay through the roof.
Do worry, Trump will find a way to make things even worse.™
As I have commented many time, bond market yields has been flirting with disaster, They keep flirting with a major breakout above 5 percent.
That’s wait and see too.
It’s perplexing to me why bonds are so range bound. Seems like the bond market is living in a different reality that the rest of us.
Or a little help from the fed, Thursday’s report should be interesting.
Or it knows more than you do.
I am concerned about my US summer vacation starting in May….:(
I’m supposed to be escaping America this year and if airlines are bankrupt I’m going to have to ride a freighter or oil tanker or swim across the Pacific.
see, all that exit strategizing and still a major wrinkle!
“Everyone has a plan until you get punched in the face.” -Mike Tyson
After flying over spring break, we decided to stay grounded this summer and avoid the Trump Aviation Clown Circus. We got in line at 5 AM and we were about a quarter mile from the TSA checkpoint. F that Klowntasia.
I had to fly somewhere for work during peak circus. Was stuck in a TSA line for 2.5 hours. I think they’re running out of money for TSA soon enough.
It must have varied greatly which airport you used.
Our neighbors flew Miami to Salt Lake City for a ski tip and said the lines were fine.
Flew through DIA last week, no wait. Looking at tickets to Hawaii for late summer, they’ve gone up but still in the $400s, that’s cheap compared to the hotel.
I repeat,perhaps we should have just allowed Iran to fully complete the development of the nuke bombs it desires, so that the world economic system doesn’t get disturbed? 🥰
But was it Bessent who asked what might happen to the world economy if Iran set off a nuke in London? Or more likely, Tel Aviv?
You know what, North Korea has nukes as does Pakistan. Where’s this nuclear boogeyman Armageddon?
Over and over again you repeat the same BiBi/AIPAC garbage. Honestly, the only country really threatened by Iran is Israel and the world is turning against it so perhaps nukes aren’t the thing you should be worried about right now.
Because those countries are slightly more sane than Iran, not governed by a religious theocracy that believes in martyrdom.
In my world view, I would have prevented both from getting nuclear weapons and would have attacked NK already to remove them as a threat. Hopefully, Trump attends to this before he leaves office.