Treasury Secretary Bessent said he supports lower interest rates but understands whether the Fed might want to wait.

Treasury Secretary Scott Bessant expressed confidence Tuesday that inflation will moderate throughout the year, giving the Federal Reserve room to cut interest rates.

But Bessent added that he understands central bank policymakers are taking a cautious approach until the impact of the Iran war becomes clearer.

“I am confident that core inflation, which is fully under control and is actually falling in many categories, will continue to fall,” he told reporters at the Semaphore World Economic Conference in Washington, DC.

“I think rates should be lowered,” he said, “but if they want to wait until there is some clarity, I understand that.”

These comments come as recent data showed consumer prices rose 0.9% and producer prices rose 0.5% in March. Most of these gains have come from soaring energy costs since the war with Iran began in late February.

But core inflation moderated significantly, rising just 0.2% on the consumer side and 0.1% on the wholesale side, according to Bureau of Labor Statistics data.

Bessent noted that government bond yields are falling, reflecting lower inflation expectations as oil prices plummet as a result of the ceasefire.

In his initial remarks at the meeting, Bessent also said he understood the Fed’s warnings.

“Do you think we should lower the rates? Ultimately. I think we’ll have to wait for now,” Bessent said in an on-stage interview Monday.

Bessent has previously said that Federal Reserve Chairman Jerome Powell must hurry to cut interest rates, saying in January that “the only ingredient missing for stronger economic growth is a cut,” which is why the Fed should not delay cutting rates.

High price levels complicate the Fed’s mission as it watches inflation rise along with slowing growth. The central bank was last expected to keep interest rates steady this year, with a hike least likely, according to federal funds futures prices.

“The economy was very strong in January and February,” Bessent told Semafor.

Powell’s term as chairman ends in May, but he may have to stay on for longer if Trump’s chairman nominee, Kevin Worth, whom Bessant helped select, is not confirmed by the Senate by then. Sen. Thom Tillis, R-N.C., has vowed to block a Warsh vote until U.S. Attorney Jeanine Pirro concludes her criminal investigation into Powell related to the Federal Reserve’s building cost overruns. Powell said the investigation was aimed at putting pressure on the Trump administration for not cutting interest rates further.

See the full Semafor story here.

— CNBC’s Matt Peterson contributed reporting..