Bessent's remarks landed after Fed Chair Kevin Warsh's Jackson Hole debut had pushed September hike odds toward 60 percent on CME's FedWatch tool. The dollar ticked lower following the interview, with Bessent's supply shock framing floated as a possible catalyst, even though the implied odds of a hike were little changed on the day. Traders will note that Bessent and Warsh travelled to the G20 together, which Bessent brushed off as tennis talk, but the timing invites speculation that the comments were designed to give Warsh cover to hold off tightening. The final decision rests with the wider committee, where several officials have continued to signal support for a hike, so the gap between Bessent's framing and the voting bloc's tone remains a live source of uncertainty into the meeting.---Earlier:Treas Sec Bessent: Oil price are going to come down. US 10 year yield is where it was when Pres. Trump took office.---Bessent won't call the Fed's September decision, but his supply shock argument reads as a case for holding rates rather than raising them.Summary:Bessent said he would not speculate on the Fed's September decision, but laid out reasoning for why a hike might not be warranted.His core argument: the Fed traditionally does not raise rates into a supply shock unless second or third order effects emerge, and he said core inflation has remained very restrained.He also pointed to an expected productivity boom on the other side of the AI buildout as a disinflationary factor.The comments came after Fed Chair Kevin Warsh's debut Jackson Hole speech on Friday, following which September hike odds moved to near 60 percent on CME's FedWatch tool, versus about 66 percent shortly before.Bessent and Warsh flew to the G20 together, which some read as context for the timing of Bessent's remarks, though he described their conversation as being about tennis.Away from rates, Bessent also touched on oil prices falling, Iran's negotiating posture, US bond market resilience, the 10 year yield, and said Japanese authorities favour yen strength; he was notably pointed on Canada, saying its PM is not acting in his country's best interest despite being offered a strong trade deal.Treasury Secretary Scott Bessent said on Monday he would not speculate on what the Federal Reserve will decide at its September meeting, but in a CNBC interview he set out a case for why holding rates steady could be the more defensible path."It is my belief that we've seen a supply shock. And traditionally, you don't raise interest rates into a supply shock unless you see second or third order effects, and we are seeing the core inflation has remained very, very restrained," Bessent said. He added that a productivity boom is likely to emerge on the other side of the artificial intelligence buildout, a factor that would tend to ease price pressures further rather than add to them.The remarks came days after Fed Chair Kevin Warsh delivered his first Jackson Hole address on Friday, after which September hike odds on CME's FedWatch tool moved to near 60 percent, down from about 66 percent shortly before. The dollar edged lower following Bessent's interview, and his supply shock comment was floated as a possible trigger, even though the probability of a hike was little changed on the day itself. Bessent and Warsh had travelled to the G20 on the same plane, a detail Bessent waved off by saying their conversation had been about tennis, though the timing has fuelled speculation that his remarks were intended to give Warsh room to delay tightening. Any such intent would still need to clear a committee vote, and a number of Fed officials have continued to talk in favour of a hike, leaving the September outcome genuinely contested.Bessent's interview ranged well beyond rates. He said he expects oil prices to fall, and reiterated that the administration believes Iran is not yet ready to make a deal, framing an unspecified operation as a lever that would eventually push Tehran toward one. On the bond market, he called it the most resilient in the world, arguing that if there were real doubts about US debt, investors would be selling Treasuries in favour of other markets rather than holding the line, and noted the 10 year yield sits near where it stood when the President took office. He said he does not believe he can move the market's equilibrium price for bonds. On currencies, Bessent said he believes Japanese authorities favour a stronger yen and that the market is already pricing in that expectation. He also addressed trade relations with Canada, saying the two countries are not in a trade war and that Canada had been offered better terms than any other country, while adding that he does not believe Prime Minister Carney is acting in the best interests of the Canadian people. He separately described a productive meeting with the head of the People's Bank of China the previous night, though he offered no specifics on its content. This article was written by Eamonn Sheridan at investinglive.com.