U.S. Treasury Secretary Bessent: The Fed Chair selection process has begun, and the lifting of the Nvidia H20 ban is a bargaining chip in U.S.-China negotiations.

U.S. Treasury Secretary Scott Bessent was interviewed this morning on 7/16 to discuss the recent U.S. inflation data, the future of Federal Reserve Chairman Jerome Powell, NVIDIA's adjustments to chip exports to China, and the progress of trade negotiations by the Trump administration in Europe, Japan, and China. He emphasized that a single inflation data point is not important; trends are key, and reiterated that Trump will not replace Powell, with the selection process for the Fed Chair already underway. He also revealed that the lifting of restrictions on NVIDIA's H20 chips is one of the bargaining chips in U.S.-China negotiations, with more market opening topics to follow, which will ultimately benefit the U.S. and global economy in the long run.

Don't focus too much on a single inflation data point; the trend is key.

Regarding the fact that the United States has consecutively published inflation data that is milder than expected for 4 times, whether this is a long-term trend or just noise. Bessenet responded to this:

"I believe that a single inflation data point is not important; the trend is key."

He added that early on, Wall Street and many economists misjudged that tariffs would lead to soaring prices, but in fact, that did not happen. However, there are still some within the Fed who are concerned that this situation could arise this summer.

Trump will not fire Powell, using "basketball" as a metaphor to pressure the Fed.

As for whether the White House and the Treasury are considering replacing Fed Chairman Powell, Bessent stated:

"President Trump has repeatedly stated that he will not fire Powell; it's just like pressuring the referee while playing basketball."

He also mentioned that Kevin Hassett, the director of the White House National Economic Council, was asked over the weekend whether he could fire the Fed chairman, to which his response was, "We are currently studying it." However, Bessent emphasized:

"President Trump does not plan to fire Powell, and I will not comment on future policies or possible mistakes that may occur in the future, only discussing the past forecasting errors of the Fed, and this time may again be a misjudgment."

The selection process for the Fed chair has begun early, and the final candidate will be decided by Trump.

The host followed up, asking whether it was because Powell's term ends in May 2026 that they are waiting for a natural turnover, or if they are concerned that an immediate replacement could have negative consequences. Bessent responded:

"The independence of the central bank is important for monetary policy and has an impact on financial markets and long-term interest rates."

He stated that the selection process for the Fed Chair is expected to begin this fall, but the formal procedure has already been initiated, with quite a few internal and external candidates, ultimately decided by President Trump. As for whether it is possible to choose a current Fed committee member as a successor, Bessent stated:

"There are good candidates both inside and outside. Traditionally, the Fed chairman leaves the board after stepping down; staying on would actually create market confusion."

( Trump names Powell's successor, how long is the FED chairman's term? How is the chairman of the Federal Reserve selected? )

NVIDIA H20 is unblocked as a bargaining chip for US-China negotiations, a new round of talks is about to begin.

The topic then shifted to the lifting of the ban on the Nvidia H20 chip, and Besant stated:

"If domestic Chinese manufacturers already have chips of equivalent specifications, then H20 can be sold, because what we least want to see is China circumventing American chips and creating a 'Digital Silk Road.'"

The host pressed, "H20 was clearly banned from export in April, so why is it being released now?" Besant admitted:

"That was our bargaining chip during the negotiations in Geneva and London. The U.S.-China negotiations are about mutual needs; they have what we want, and we have what they want."

He added that he expects to meet with the Chinese Vice Premier in a few weeks, but the location and time are still being coordinated, as the Chinese leadership has an important meeting in early August, which may take place in a third country before or after the meeting. The next steps to discuss are China's market opening, increasing domestic demand, and consumption.

( NVIDIA H20 Unlocked, Trump Eases Chip Exports! Jensen Huang: Attracting Developers is Key to America's AI Leadership )

The August ceasefire does not affect the negotiation progress, and Trump's maximum pressure strategy is effective.

The host asked whether there is a desire to enter the next phase of negotiations before the temporary ceasefire deadline between China and the United States on August 12. Bessent responded:

"We are in a very good state now, the market doesn't need to worry about 8/12."

But the host reminded that the current European tariff is 30%. Will Trump raise the tariffs on Europe again? Besent pointed out:

"President Trump's negotiating chips are quite sufficient, whether it's directly imposing a 30% tariff or reaching a better agreement with Europe. However, if the negotiators don't present the best terms, the tariffs might rebound, it's hard to say."

He emphasized that Trump's "maximum pressure strategy" is very effective, and many agreements that were already good have been negotiated even better step by step, while the market is actually very calm, close to historical highs, because from a long-term perspective, it is a good thing for the U.S. and the global economy.

The UK has taken the lead in finalizing the agreement, and Bessent joked that he would not concurrently serve as the Chairman of the Federal Reserve (FED).

The host asked which countries are sincere at the moment and who is still dragging their feet? Besent replied:

"Just a few days ago, I congratulated the UK for their quick actions in securing a great deal while other countries are still dragging their feet."

He said he will be going to Japan this weekend to attend an international expo, mainly for the celebration of the American Theme Day, and will bring the Secretary of Labor and the Deputy Secretary of State with him, not to negotiate.

When asked whether Bessent would consider serving as both the Secretary of the Treasury and the Fed Chairman, he replied with a smile:

"I think I already have the best job in the White House and will fully cooperate with President Trump. However, the Fed still has many excellent candidates, and the selection process will be quite strict."

This article discusses U.S. Treasury Secretary Bessent: The Fed chair selection process has begun, and the lifting of the ban on NVIDIA H20 is a bargaining chip in U.S.-China negotiations, first appeared in Chain News ABMedia.