The other day, I heard that Scott Bessent had lunch with Jerome Powell at the Federal Reserve—their first-ever meeting. Before us stand two of the greatest political money thinkers of our era, a realization that only now fully dawns on me. I hesitate to say this, but if they remain focused, driven, and deliberate, they may be remembered among the greatest financial minds of our time—alongside Mellon, Jefferson, Volcker, and others.
They are both, in coordination, trying to accomplish something that few understand and will determine the country’s future:
- Ending inflation
- Fighting against unfair trade practices
- Revitalizing private sector growth
- Protecting the country from soft power attacks by other countries
Without me diving in too much, let me start with this talk from Jerome Powell:
Now let’s move to this chat with Scott Bessent:
Be sure to watch these two interviews above. Then, imagine the lunch they had and the priorities discussed.
It’s no secret that Powell is committed to reducing inflation. He has often acknowledged that no Fed chair wants to raise interest rates—it’s both painful and unpopular. Bessent agrees but also recognizes that the country cannot reach its next stage of significant growth without sustainably lower rates.
How do you lower rates? Expanding energy production is one solution; another is curbing government spending to equip Powell with the tools he needs, meaning he can point to a weaker labor force.
Most importantly, reducing the government deficit is crucial, and the only viable path to achieving that is by lowering interest rates. Currently, a staggering $800 billion of our debt burden comes from interest alone. If rates were brought down to 2% or 3%, we could refinance and issue bonds at lower yields, cutting that interest expense to around $150 billion—a far more manageable figure.
To see all of my posts on this subject, go here:
