Treasury Secretary Scott Bessent is telling markets to shrug off inflation as temporary, a risky echo of the same word that badly misjudged prices back in 2021-2022.

• Bessent says the Fed should stay open-minded because the economy is facing an oil and supply shock, not normal overheating, and wants rate hikes avoided so the economy doesn't get strangled on top of it.
• His reasoning points to Iran: a tight US blockade has left Iran with no oil exports for the first time ever, and officials are predicting the Iranian economy could shrink as much as 25% year-over-year, worse than Russia's contraction after the Soviet collapse.
• Higher oil prices from the Iran squeeze are feeding into inflation, but the administration's bet is that this pressure fades on its own rather than needing higher interest rates to fight it.
• Using "transitory" again is a gamble — it's the same call that proved wrong before — which suggests either real confidence a deal or resolution is close, or a repeat of a costly misread.

Outlook: Markets will be watching Fed messaging closely for whether it buys the "transitory" framing or treats the oil-driven inflation as more persistent.