U.S. Treasury Secretary Scott Bessent said he supports revisiting the Federal Reserve’s 2% inflation target once price growth is sustainably brought back to that level.
Speaking on the All-In Podcast, Bessent said that once inflation clearly returns to 2%, policymakers could begin a broader discussion about whether a target range would be more effective. He suggested alternatives such as a 1.5% to 2.5% band or even a wider 1% to 3% range.
Bessent criticized the idea of aiming for extreme precision, calling “decimal-point certainty” unrealistic. He said a serious and open debate on inflation targeting would be appropriate, but only after credibility has been restored by meeting the existing goal.
The Federal Reserve formally adopted the 2% inflation target in 2012, aligning with many major central banks worldwide. Bessent warned against changing the target while inflation remains above that level, arguing it could undermine confidence and create the perception that policymakers routinely adjust goals upward when they fall short.
He stressed that credibility is difficult to rebuild without first reaching and maintaining the target, adding that expectations must be firmly re-anchored before any framework changes are considered.
Bessent also acknowledged the financial strain many Americans continue to face, saying policymakers understand the pressure from elevated prices. He blamed inflation largely on policies enacted under the Biden administration but noted that inflation is beginning to ease, helped in part by cooling rental costs.
Commenting on the latest Consumer Price Index data, Bessent said the report appeared broadly accurate, despite some economists questioning potential distortions caused by the October–November government shutdown. While certain components such as energy prices showed increases, he pointed to real-time data suggesting broader inflation trends are moving lower.
