Former US Treasury Secretary Steven Mnuchin Reveals His Prediction About Interest Rate Cuts, Gives The Good News!

Former US Treasury Secretary and founder of Liberty Strategic Capital, Steven Mnuchin, made important evaluations about the FED monetary policy orientation during a program he attended on CNBC.

Mnuchin announced that he expects the FED to cut interest rates by a total of 75 to 100 basis points in the next 12 months.

Mnuchin, stating that Fed Chair Jerome Powell exhibited a "wait-and-see" approach, expressed that the market had already priced in this rate cut and expected the decrease in interest rates to occur gradually. Mnuchin, saying "Unless there is a surprise development, I think we will see a decrease of about 100 basis points in interest rates," also added that Powell's cautious approach stemmed from the lasting effects of inflation previously described as "transitory."

Mnuchin said he expects Trump to announce several trade deals soon and said some tariff decisions in July could be postponed if progress is made in the negotiations. Mnuchin, who said 'So far, the tariffs imposed have not increased inflation. This also supports the market's low interest rate expectations,' reported that negotiations with countries such as China, India, and Japan are continuing.

Mnuchin, who also mentioned TikTok in his speech, said he expected the President to reach an agreement with the platform, stating that a solution involving new investors becoming partners in the company rather than a direct sale and maintaining relations with ByteDance was more likely. He said their investment interests are currently in a passive position.

Mnuchin, stating that long-term interest rates also reflect the Fed's future cuts, expressed that 10-year bond yields could fall to the range of %4 - %4.25, but it is unlikely to drop below %4. The former minister, who stated that he does not expect a significant slowdown in the economy, noted that the market is acting with this outlook.

Highlighting the importance of the 'big tax package' expected to pass the Senate, Mnuchin argued that extending the tax cuts during the Trump era is critical for the market. Acknowledging that long-term debt and deficits are a serious issue, Mnuchin said that if economic growth hovers around 3%, deficits could be controlled; otherwise, inevitable cuts in public spending would be necessary.

*Not investment advice.

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