(Alliance News) - US Treasury Secretary Scott Bessent called on the Federal Reserve to enact a half-point rate cut next month, but wants the Bank of Japan to hike, accusing it of being "behind the curve", Bloomberg reported.

In an interview with Bloomberg TV, Bessent said the federal funds rate should be at least 150 basis points lower than it currently is.

Last month, the US central bank decided to keep interest rates at a range between 4.25% and 4.50%, holding steady for the fifth straight meeting.

But Bessent told Bloomberg TV: "I think we could go into a series of rate cuts here, starting with a 50 basis-point rate cut in September.

"If you look at any model...we should probably be 150, 175 basis points lower."

US President Donald Trump has repeatedly called on the Fed to cut, most recently earlier this week.

"Jerome 'Too Late' Powell must NOW lower the rate," Trump said on social media after a softer-than-expected US inflation report.

Data on Tuesday showed the pace of US consumer price inflation undershot expectations by being steady at 2.7% in July.

Weaker labour market data also has strengthened the case to cut interest rates.

The Bureau of Labor Statistics said nonfarm payrolls grew by 73,000 in July, shy of the FXStreet-cited consensus of 110,000. It is also short of the 147,000 initially reported for June.

However, June's number was sharply revised to just 14,000. What's more, May's reading was downwardly revised to 19,000 from 144,000.

Bessent said there is a "big list" of possible candidates to succeed Powell at the Fed when his term concludes in May.

On the Bank of Japan, Bessent said "they're behind the curve" in the fight against inflation.

"So they're going to be hiking, and they need to get their inflation problem under control," he told Bloomberg.

In July, the BoJ kept its main interest rate unchanged at 0.50%, as expected by economists.

Data last month showed Japan's consumer price inflation eased in line with expectations in June.

According to the Statistics Bureau of Japan, the national consumer price index rose 3.3% year-on-year in June, slowing from a 3.5% annual rise in May. The annual rise in core CPI, which excludes volatile fresh food prices, slowed to 3.3% in June from 3.7% in the previous month.

Deutsche Bank analysts noted that it is not the first time the US Treasury has made a foray into Japanese monetary policy.

"The US Treasury have commented on BoJ policy before, and in their semiannual currency report, it said that 'BoJ policy tightening should continue', and that tighter policy support 'a normalization of the yen's weakness against the dollar and a much-needed structural rebalancing of bilateral trade'," Deutsche analysts said.

Against the yen, the dollar fell to JPY146.56 on Thursday morning UK time from JPY147.40 at the time of the New York equities close on Wednesday.

By Eric Cunha, Alliance News news editor

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