Bessent’s Rate View Defies Fed Models, Deutsche Bank Says

Treasury Secretary Scott Bessent’s view that the Federal Reserve’s interest rate is more than a percentage point above levels indicated by models is wrong, Deutsche Bank interest-rate strategists said.

Bessent said on Aug. 13 that “any model” suggests that the Fed’s policy rate “should probably be 150, 175 basis points lower. Since then, a search for applicable models has come up empty, with Deutsche Bank strategists led by Matthew Raskin being the latest to join the effort.