World Economy

Bessent Signals Fed Flexibility as US-China Trade Pact Extended

Treasury Secretary Scott Bessent told policymakers to remain flexible on interest rate decisions. He cited expectations that productivity improvements will help contain inflation pressures. The administration extended its trade agreement with China through January 10, maintaining reduced tariffs and suspending additional trade actions negotiated last year. This extension provides near-term visibility on US-China commerce for supply chain participants. Meanwhile, Federal Reserve officials signaled they may need to raise interest rates further to achieve inflation targets. The administration is also examining potential restrictions on diesel exports, according to Bessent. Supply chain participants face continued uncertainty over trade policy direction, though the tariff truce extension offers stability for US-China trade.