The dispute between the Minister of Finance and an official at the Central Bank over the effect of the Iran war on inflation.
Scott Bessant, the US Treasury Secretary, says the country's central bank should not raise interest rates in response to inflation caused by the rise in energy prices following the war with Iran.
On Friday, Mr. Bessant said in an interview with CNBC that the US economy is still strong and the rise in inflation is due to the "energy supply shock." He emphasized that the central bank should pay attention to the future prospects of the economy, instead of making decisions based on past statistics.
The US Treasury Secretary emphasized that he does not intend to give orders to the central bank, but he does not consider the sharp increase in interest rates in response to a shock to the energy supply a good decision. Mr. Bassant, who has been transferred from his residence in Washington to a military base since two days ago and after receiving threats on his life, said to be from "factors associated with Iran", in this interview in a fierce ground attack on the leaders of the Islamic Republic, said that life threats against him and the other members of the American cabinet will not deter Washington from continuing to press.
Shortly after the broadcast of Mr. Bessant's interview, Austin Goolsby, head of the Chicago branch of the Federal Reserve Bank of America, disagreed with this assessment on the same network, saying that inflationary pressures are no longer limited to rising oil prices and have spread to the service sector, health care and areas related to the expansion of artificial intelligence data centers.
According to him, "inflation caused by tariffs and the oil price shock should have disappeared by now, but it hasn't." According to Mr. Goolsby, continued inflation in sectors not directly related to oil prices or trade tariffs is a concern, and even lower oil prices will not necessarily solve this problem.
Recent reports on higher than expected increases in employment and inflation in the US strengthened the possibility of another interest rate hike. Some officials at the central bank even raised the possibility of raising the interest rate by half a percent at the meeting on December 8 and 9.
Referring to the central bank's goal of bringing inflation to two percent, Mr. Goolsby said: "My feeling right now is that we are not on the way back to two percent and we need to deal with this issue."