US Treasury’s Bessent: Rate Cuts Could Revive Mortgage Market

US Treasury Secretary Bessent: Lower Rates Would Revive Mortgage Market

Bessent Comments on Rates, Fed, and Trade Negotiations

US Treasury Secretary Scott Bessent stated on Monday that a fall in interest rates could free up the US mortgage market, boosting housing activity and affordability. Speaking in an interview with CNBC, Bessent noted the need for a broader assessment of the Federal Reserve’s structure, while sidestepping direct comment on internal White House discussions around Fed Chair Jerome Powell.

“We need to study the entire Fed institution,” Bessent said, when asked about reports suggesting he advised President Donald Trump against removing Powell.

Mortgage Market Poised for Rebound on Rate Cut

Bessent emphasized that lower interest rates could unlock pent-up demand in the US housing market, which has struggled amid high mortgage rates and tighter credit conditions.

Analysts suggest that a rate cut by the Federal Reserve could reduce long-term yields, bringing mortgage rates down from their current elevated levels near 5%.

Trade Talks Continue with EU and China

On the international front, Bessent highlighted that trade talks with the European Union have gained momentum, and discussions with China are also expected to resume soon.

“The EU is becoming more engaged,” he said, reinforcing expectations that diplomatic negotiations may avert further tariff escalations before the upcoming August 1 deadline.

Conclusion

Bessent’s comments support growing speculation that the Federal Reserve may ease monetary policy in the coming months to support credit markets and economic growth. Meanwhile, improved trade dialogue with the EU and China could offer additional stability amid global uncertainty.

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