Treasury Secretary Scott Bessent said interest rates should be substantially lower than they are now, and he believes there is a good chance the Federal Reserve will start with a large cut next month.

U.S. Treasury Secretary Scott Bessent clarified Thursday he is not calling for interest-rate cuts by the Federal Reserve, saying his remarks only pointed to models showing the neutral rate about 150 basis points lower.

I think we could go into a series of rate cuts here, starting with a 50 basis-point rate cut in September,” Bessent said in a television interview on Wednesday. Fed policymakers last month kept their benchmark at a target range of 4.