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Treasury Chief Expects Substantial Disinflation Ahead as New Fed Leadership Takes Helm

Treasury Secretary Scott Bessent predicted substantial disinflation in coming months, even as recent inflation data has disappointed across multiple measures. Bessent acknowledged one or two additional months of elevated inflation readings before conditions improve. Energy-driven price increases should reverse as crude oil production increases, he said, easing supply constraints from the Iran war. Core inflation, which excludes volatile food and energy costs, rose 0.4% in the latest reading. Wholesale price inflation accelerated 1.4%, reaching a 12-month level of 6%—the highest mark since late 2022. Import and export prices similarly climbed to four-year highs. Kevin Warsh officially assumed leadership of the Federal Reserve after Senate confirmation Wednesday, taking over from Jerome Powell, whose term ends Friday. Bessent expressed confidence that current conditions differ meaningfully from the 2021-2022 inflation episode.