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Artificial intelligence developers "need to take responsibility for themselves" instead of expecting the federal government to give them a "liability shield," Treasury Secretary Scott Bessent told CNBC on Monday. "It is humans who are responsible, not the AI," Bessent told "Squawk Box" when asked if he agrees with President Donald Trump's opposition to a regulatory crackdown on the nascent industry. Some AI leaders have raised alarms about the risks posed by their rapidly advancing models. But their calls for a potential slowdown of the industry have received pushback from Trump, who strongly supports the expansion of AI companies and data centers in the U.S. Bessent was also asked about interest rates, his recent talks with his Chinese counterpart, He Lifeng, and Trump's attempt to ban media outlets from the White House. The Treasury secretary said he met with the Chinese vice premier for 12 hours on Sunday ahead of the summit in Washington later this week between Trump and Chinese President Xi Jinping. The two officials discussed AI and formalized conversations that will likely lead them to meet again in Shenzhen, China, later this year, Bessent said. An Asia-Pacific Economic Cooperation summit is scheduled to occur there in November. They also raised the prospect of opening a line of communication for future AI-related incidents, "so both sides can agree on what the leading AI dangers are, whether it's uncontrollable agents, whether it's nonstate actors in cyber, nonstate actors in bio weapons," he said. Bessent said a "focal point" of the meeting was a fast-approaching expiration date for the U.S. and China's temporary trade truce. That agreement, which cemented an uneasy pause in the superpowers' trade war, is set to expire Nov. 10. The talks took place as Bessent leads the U.S.' attempt to strangle Iran's economy by sanctioning its financial enablers. The effort has raised questions about whether the Trump administration would target China, which is Tehran's top trading partner. Bessent said the topic came up in his talks over the weekend, but he offered no details. Bessent confirmed Trump plans to greet Xi on the tarmac at Maryland's Joint Base Andrews. "I think we're going to have a great visit," he said. Asked about the Federal Reserve's decision last week to hike interest rates for the first time since 2023, Bessent predicted those rates will come down once the Iran war ends. "Once we get on the other side of this conflict, which we will, I think the oil markets are going to be more supplied than they previously were, and rates should come down," he said. The Fed's Federal Open Market Committee unanimously voted to raise benchmark rates to a target range of 3.75% to 4% in order to reduce "elevated inflation." Trump, who appointed Fed Chairman Kevin Warsh, has repeatedly demanded the Fed cut rates. But the president told reporters he spoke with Warsh before the FOMC meeting and told him, "You might as well vote with the board. It's not going to matter." Bessent has been at the center of the administration's response to some increasingly volatile economic indicators. Last week, he touted a Sept. 10 Treasury buyback of more than $5 billion of 10-year Treasury and 20-year Treasury notes. Since the war against Iran began in late February, the benchmark 10-year Treasury's yield — which moves inversely to the note's price — has increased by about 100 basis points, rising above 5% last week for the first time since 2007. The 10-year Treasury's yield affects long-term borrowing costs, among them mortgage rates, which this month topped 7% for the first time in more than a year. In testimony to the House Financial Services Committee on Sept. 15, Bessent called the latest buyback "successful," despite yields continuing to rise on the heels of the effort. "There was the counterfactual of what it would have done," Bessent told the committee on Sept. 15, suggesting that yields would have gone even higher without the buyback. "Since President Trump has come in, [the U.S. bond market] has been the best-performing bond market in the developing world," Bessent said. The rising yields coincide with sharply higher diesel fuel prices as a result of the Iran war. Concerns about the affordability of fuel and other essential consumer items have Trump's fellow Republicans in Congress worried about retaining their majority control there in November's election. Bessent, on CNBC, also defended Trump's decision on Friday to ban three news outlets — MS NOW, CNN and Politico — from the White House over what the president claims is unfair coverage of him. Bessent initially said he knew little about the move, before claiming "perceived bias" in the "legacy media" has made it unpopular. "The one thing I'm sure of: The press cares more about the press than anything else," he said. The three news outlets sued Trump on Monday on First Amendment grounds. Disclosure: CNBC and MS NOW are divisions of Versant Media.
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