US Treasury Secretary Bessent Favors De-risking Over China Decoupling, Optimistic on Inflation

US Treasury Secretary Scott Bessent has clarified the administration's economic stance toward China, emphasizing a strategy of "de-risking" rather than a full "decoupling" of the two economies. Speaking on trade policy, Bessent noted that the primary goal is to secure supply chains and protect national interests without severing vital commercial ties. On the domestic front, the Secretary expressed confidence in the current disinflationary trend, suggesting that price pressures are on track to return to the Federal Reserve's 2% target by mid-year. This optimistic outlook on inflation provides a potential tailwind for macroeconomic stability as the Fed navigates its next steps in monetary policy. Market participants reacted to the comments as a sign of a more pragmatic approach to international trade, potentially easing fears of an immediate escalation in trade tensions. The combination of moderated trade rhetoric and a positive inflation forecast has influenced sentiment across major instruments, including the DXY and USD/CNH.