US Treasury Secretary Scott Bescent has warned that persistently high interest rates may have pushed parts of the US economy—particularly the housing sector—into recession, reiterating calls for the Federal Reserve to speed up rate cuts.

"While I believe the overall economic fundamentals remain strong, certain sectors are clearly in recession," Bescent stated. "The Fed's policies have also created significant distributional challenges." He emphasized that elevated mortgage rates continue to weigh on the housing market. "Housing is effectively in a recession, with lower-income consumers bearing the brunt due to high debt and limited assets."

Data from the National Association of Realtors showed pending home sales remained flat month-over-month in September. Bescent described the broader economic environment as a "transition period" and criticized Fed Chair Jerome Powell's recent suggestion of a potential pause in rate cuts in December.

Separately, Federal Reserve Governor Steven Milan—currently on leave but set to return as White House Economic Advisory Council Chair in January—warned in a Friday interview that delaying rate cuts could trigger a recession. Milan had dissented in the Fed's last decision to cut rates by just 25 basis points, advocating instead for a 50-basis-point reduction.

"Maintaining policy at such restrictive levels for too long risks turning monetary policy itself into a recession catalyst. If inflation upside risks are limited, I see no reason to take that gamble," Milan argued.

Bescent echoed this view, noting that the Trump administration's spending cuts had helped reduce the federal deficit-to-GDP ratio from 6.4% to 5.9%, aiding inflation control. "Further fiscal contraction should keep inflation declining, and the Fed should keep cutting rates accordingly," he added.