Treasury Secretary Touts Economic Growth, Downplays Recession Risks

Scott Bessent, Secretary of the Treasury, made headlines in an exclusive interview with Meet the Press, addressing the state of the US economy and emphasizing that inflation remains driven by the service sector rather than by tariffs. Bessent responded to questions about the Trump administration’s recent decision to roll back tariffs on over 200 food products, stating that the impact on inflation from these rolled-back tariffs is minimal and that most upward price pressure comes from the service side of the economy. He explained that while food prices such as bananas and coffee have risen sharply, many of those items are now seeing relief thanks to ongoing trade negotiations, especially with Latin American countries.

When pressed about affordability, Bessent pointed to clear signs of improvement, highlighting increased home sales and a drop in energy prices over recent months. He forecasted that further price decreases could occur within weeks or months, particularly as new trade agreements take effect and additional supply reaches the market. He described inflation as a composite measurement, emphasizing that the Treasury is targeting sectors it can influence, such as energy, to help foster broader relief for consumers.

Discussing the recent 43-day government shutdown, Bessent acknowledged it caused an 11 billion dollar permanent loss to the economy, but insisted this would not tip the US into a recession. According to Bessent, only interest rate sensitive sectors, such as housing, dipped into temporary recession territory, and those are already rebounding. He went on to assert that there is no broader recession risk for the US, emphasizing his confidence in strong economic growth for 2026, supported by lower interest rates, tax cuts, and expanded trade.

Bessent highlighted the rollout of the One Big Beautiful Bill Act, a legislative package with major tax changes expected to boost real incomes, particularly for working families. Features of the bill include eliminating taxes on tips and overtime and making automobile loans for American cars tax-deductible. He indicated that many Americans would see substantial refunds in the first quarter of 2026 because of these policy shifts.

He further mentioned that the administration is planning an announcement to reduce healthcare costs in the coming week. Bessent also referenced ongoing trade deals that he expects to stimulate job creation, as seen by Boeing expanding its Dreamliner plant, adding 1000 jobs in Charleston, South Carolina.

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