Abstract:
U.S. Treasury Secretary Scott Bessant said on Monday that artificial intelligence developers "need to take responsibility themselves" rather than expect the federal government to provide them with "liability immunity protection." When asked if he agreed with President Trump's opposition to regulatory crackdowns on the nascent industry, Bessant responded: "Humans, not AI, are responsible."
Some U.S. artificial intelligence industry leaders have warned of the risks posed by their rapidly iterative models. But Trump has strongly supported the expansion of U.S. artificial intelligence companies and data centers, pushing back on their calls to slow down the industry.
Asked about the Federal Reserve's decision last week to raise interest rates for the first time since 2023, Bessant predicted rates would fall once the war with Iran ends.
“Once we come out of this conflict—and we will—I think the oil market will be better supplied than ever and interest rates should come down.”
The Federal Open Market Committee (FOMC) voted unanimously to raise the benchmark interest rate to a target range of 3.75% to 4% to reduce "high inflation."
Trump appointed Federal Reserve Chairman Kevin Warsh and has repeatedly asked the Fed to cut interest rates. But Trump told reporters that he had a call with Warsh before the FOMC meeting and told him: "You might as well vote according to the committee's opinion, it won't make any difference."
Bessant has been at the center of the government's response to some increasingly volatile economic indicators. Last week, he praised the Treasury Department's more than $5 billion in 10- and 20-year Treasury repurchase operations on Sept. 10.
The benchmark 10-year Treasury yield - which moves inversely with Treasury prices - has risen about 100 basis points since the war against Iran began in late February, topping 5% for the first time last week, the highest level since 2007.
The 10-year Treasury yield affects long-term borrowing costs, including mortgage rates, which this month topped 7% for the first time in more than a year.
In testimony before the House Financial Services Committee on September 15, Bessant called the recent repo operations "successful," although yields have continued to rise since then.
“There is a counterfactual scenario of what would have happened if this had not been done,” Bessant told the committee on September 15, suggesting that without this buyback, yields would have risen even higher.
“The U.S. bond market has been the best-performing bond market in the developed world since President Trump took office,” Bessant said.
Rising yields coincide with a sharp increase in diesel fuel prices due to the war in Iran.
Concerns about the affordability of fuel and other basic consumer goods have Trump's fellow Republicans in Congress worried about their ability to retain majority control in November's election.
Bessent also defended Trump's decision on Friday to ban three news outlets - MS NOW, CNN and Politico - from the White House that Trump claimed had unfairly covered him.
Bessant initially said he knew little about the move, before claiming "perceived bias" from "legacy media" had made it unpopular.
"One thing I'm sure of: the media's biggest concern is the media itself," he said.
The three news outlets filed lawsuits against Trump on Monday on First Amendment grounds.
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