Ex-Treasury Secretary Predicts 100 Basis Point Fed Rate Cut – Here is When
Steven Mnuchin said Fed Chair Jerome Powell is maintaining a “wait-and-see” stance, reflecting caution in the face of inflation that has proven more persistent than previously expected.
However, Mnuchin added that the market has already priced in a gradual path of easing.
“Unless we see a major surprise, I think we’re looking at a total of 100 basis points in rate cuts,” Mnuchin said.
Trade Developments and Tariffs Could Influence Market Outlook
Mnuchin also discussed upcoming trade negotiations, suggesting that President Trump is preparing to announce several new trade deals. If those talks advance, some tariff actions scheduled for July could be postponed, he said.
“The tariffs implemented so far haven’t driven inflation higher,” he noted, arguing this supports the market’s expectations for lower interest rates.
Negotiations with China, India, and Japan are reportedly ongoing, and progress could affect the broader macro outlook in the months ahead.
TikTok Talks May End in Partial Ownership Deal
Addressing the future of TikTok, Mnuchin suggested that a full sale is unlikely. Instead, he sees a resolution involving new investors joining the company while maintaining ties with parent firm ByteDance. Mnuchin added that while he had previously expressed interest in the platform, he currently has no active investment role.
10-Year Yields Could Drop, But Economy to Stay Resilient
Mnuchin expects long-term rates to remain stable but trend slightly lower as rate cuts take effect. He forecasted the 10-year yield could fall to the 4.00%–4.25% range but said a drop below 4% is unlikely.
Despite rising debt levels, he dismissed fears of an imminent slowdown. “The market is acting as if growth will hold steady,” he said.
Trump-Era Tax Cuts Key to Fiscal Outlook
Mnuchin also emphasized the importance of extending the Trump-era tax cuts, calling the expected Senate package a critical market factor. He acknowledged that deficits and long-term debt remain a serious challenge but suggested the situation can be managed if economic growth stays near 3%. Otherwise, he warned, public spending cuts would be necessary.
Kosta Gushterov
Reporter at Coindoo
Kosta joined the team in 2021 and quickly established himself with his thirst for knowledge, incredible dedication, and analytical thinking. He not only covers a wide range of current topics, but also writes excellent reviews, PR articles, and educational materials. His articles are also quoted by other news agencies.
