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Bessent Forecasts 'Substantial Disinflation' as Warsh Assumes Fed Leadership

Treasury Secretary Scott Bessent predicted significant price moderation ahead despite persistent recent inflation readings. New Federal Reserve Chair Kevin Warsh takes over after Jerome Powell's term ends Friday. Speaking Thursday, Bessent acknowledged one or two additional inflation spikes remain likely before disinflation takes hold. He attributed recent energy-driven price pressures to supply shocks stemming from the Iran war, noting that increased U.S. oil production should relieve the squeeze. Core consumer prices advanced 0.4% in the latest period, while wholesale prices surged 1.4% with 12-month levels reaching 6%—the highest since late 2022. Import and export pricing also climbed to four-year highs. Bessent emphasized core inflation was declining before the geopolitical disruption and should resume its downward trajectory. He expressed confidence the current inflation episode differs fundamentally from the 2021-2022 surge that followed the pandemic.