The likelihood of a Federal Reserve rate cut in September is now seen near 100% after new data showed U.S. inflation increased at a moderate pace in July and Treasury Secretary Scott Bessent said he thought an aggressive half-point cut was possible given recent weak employment numbers.

Traders in contracts tied to the benchmark federal funds rate on Wednesday put the odds of a quarter-percentage point cut at the Fed's September 16-17 meeting at 99.9%, according to estimates calculated by the CME Group's FedWatch tool that followed the release of July Consumer Price Index data on Tuesday and later comments by Bessent noting that the Fed had used fears of a weakening job market as justification for a larger cut last September.

Trump has slammed last year's cut, the first of three that took place before and after his election, as politically motivated given the proximity to the November presidential vote.

Bessent rooted his argument in recent Bureau of Labor Statistics revisions showing job growth had slowed to a crawl in May, June and July, in contrast to initial BLS estimates for May and June indicating stronger employment growth. Fed officials relied on those stronger numbers to argue that the labor market remained in good shape and to hold rates steady at meetings in June and July.

"If we'd seen those numbers in May, in June, I suspect we could have had rate cuts in June and July. So that tells me that there's a very good chance of a 50 basis-point rate cut," in September, Bessent said in an interview on Bloomberg television.

"Rates are too constrictive...We should probably be 150 to 175 basis points lower," Bessent said, adding to the Trump administration's penchant for public criticism and detailed policy advice for the independent central bank.

Bessent urged the rate cuts as the administration moves forward with its searching for a replacement for Fed Chair Jerome Powell, with the list of potential candidates now grown to 11, far larger than the short list of three Trump said he was considering just a few days ago.

The expanded list, confirmed by a White House official, now includes both of the Fed's vice chairs, Philip Jefferson and Vice Chair for Supervision Michelle Bowman, current Governor Christopher Waller, Dallas Fed President Lorie Logan, and top Trump economic adviser Kevin Hassett, along with several private sector figures.

Absent was current Council of Economic Advisers chair Stephen Miran, nominated to fill an open Fed board seat with a term that ends in January. Bessent said in his comments to Bloomberg that even if confirmed by the Senate he did not expect Miran to stay at the Fed beyond that point.

The opening Miran is filling could be needed to make room for Trump's pick to replace Powell, whose term as chair ends in May.

The rate cuts Bessent suggested stop far short of Trump's call for the benchmark rate to be cut to 1%, but would drop it from the current 4.25% to 4.5% range to around 3% — roughly what Fed policymakers consider to be a "neutral" stance that is neither boosting nor holding back the economy.

It suggests both a comfort level with the expected path of inflation toward the Fed's 2% target and the ability of the economy to maintain roughly full employment.

Fed officials have been reluctant to declare their inflation battle won, with prices rising faster than their target and expected to gather pace at least temporarily in coming months due to the impact of Trump administration tariffs.

But arguments to look past any tariff-related bump in prices are gathering steam, with more Fed policymakers saying the jobs revisions had made them more attuned to the possibility of rising unemployment, and some rate cut advocates arguing that the central bank needed to get ahead of the curve.

"A proactive approach in moving policy closer to neutral, from its current moderately restrictive stance, would help avoid a further unnecessary erosion in labor market conditions and reduce the chance that the Committee will need to implement a larger policy correction should the labor market deteriorate further," Bowman said in remarks on Saturday.