US Treasury Secretary Scott Bessent has proposed a bold strategy to increase economic pressure on Russia, calling for coordinated tariffs and sanctions between the United States and the European Union on countries purchasing Russian oil.

Collaborative Approach with European Allies

Bessent revealed that discussions have taken place with European Commission Chief Ursula von der Leyen regarding potential joint actions. The Treasury Secretary emphasized that combined US-EU sanctions could potentially accelerate the impact on the Russian economy and influence diplomatic negotiations.

Strategic Economic Measures

The proposed strategy aims to balance Ukrainian military endurance against Russian economic sustainability. Bessent's remarks underscore the urgency of implementing these measures to potentially shift the economic dynamics.

Broader Context of International Relations

This development comes amid ongoing trade discussions between various nations. Recent implementation of tariffs on Indian exports has been a topic of discussion, with assurances that diplomatic relations remain intact.

Escalating Economic Measures

There have been indications of readiness to implement additional sanctions against Russia, signaling a potential intensification of economic measures. This aligns with Bessent's proposal for joint US-EU action, suggesting a coordinated approach to addressing geopolitical challenges.

The proposed joint tariffs and sanctions represent a significant shift in economic strategy, potentially reshaping global trade dynamics and international relations. As these developments unfold, the impact on global markets and diplomatic ties will be closely watched by investors and policymakers alike.

Treasury Secretary Scott Bessent has recently made headlines for both his comments on Federal Reserve policy and his ongoing asset divestiture process.

Clarification on Fed Rate Cut Comments

Bessent clarified that he is not directing the Federal Reserve's actions regarding interest rate cuts. Instead, he pointed to economic models suggesting a neutral rate approximately 150 basis points lower than current levels. Specifically:

• Models indicate the neutral rate should be about 150-175 basis points below the current 4.25%-4.5% range
• Bessent suggested a 50-basis-point cut might be warranted for September
• The Fed's median long-run neutral rate estimate is 3%

Critics, including former Treasury Secretary Lawrence Summers and economist Julia Coronado, noted it's unusual for Treasury officials to publicly comment on monetary policy. Two Fed district bank presidents opposed a 50-basis-point September cut.

Interest-rate futures show markets expect less than 150 basis points of cuts by the end of next year, with reduced confidence in a September rate reduction following higher wholesale inflation data.

Extension for Asset Divestiture

Concurrently, Bessent has been granted an extension for completing the divestiture of his remaining assets:

• The Office of Government Ethics extended the deadline to December 15
• This extension allows more time to divest the final 4% of his assets after missing an earlier April deadline
• The extension primarily concerns farmland, described as "inherently illiquid"

Progress on Divestiture

Despite the extension, Bessent has made significant progress:

• 96% of assets slated for sale have already been divested
• Over 90% of $1.00 billion in total divestitures were completed before January 20
• Bessent's disclosed assets were worth at least $521.00 million

Remaining Assets and Recusal

The undivested assets face significant restrictions on potential buyers, excluding farmlands. Bessent will continue to recuse himself from matters involving these undivested assets to maintain ethical standards.

Advocacy for Stricter Ethics Rules

Bessent has advocated for a ban on lawmakers trading individual company stocks, calling for action against what he termed an "extractive class" of policymakers.

Implications

These developments underscore the challenges faced by wealthy individuals entering public service and the importance of transparent asset management in government roles. The extension granted to Bessent reflects the complexities involved in divesting from certain types of assets, particularly those that are illiquid or have limited marketability.

As the December 15 deadline approaches, it remains to be seen how Bessent will navigate the divestiture of his remaining assets, particularly the farmland holdings.