Treasury Secretary Scott Bessent warned that the US economy may see some disruption as the Trump administration shifts the basis for growth away from the government and toward the private sector.
“Could we be seeing this economy that we inherited starting to roll a bit? Sure,” Bessent said in an interview Friday on CNBC. “Look, there’s going to be a natural adjustment as we move away from public spending.”
A number of economic indicators have suggested a slowdown in growth, with a key gauge of manufacturing having tilted toward stagnation in March and consumer confidence declining. Bessent argues that the expansion under the Biden administration was artificially supported by government spending. He spoke before Friday’s February employment report, which showed steady job growth on the eve of policy changes.
“The market and the economy have just become hooked, and we’ve become addicted to this government spending,” Bessent said. “There’s going to be a detox period.”
Asked about whether President Donald Trump would shift his policy moves in order to prop up the stock market, the Treasury chief said that there is no such Trump “put,” as stock analysts say.
“There’s no put,” he said. “The Trump call on the upside is, if we have good policies, then the markets will go up.”
Stocks tumbled well over 1% in three of the past four trading sessions as the Trump administration imposed tariff hikes on Mexico, Canada and China. While equities rallied on Wednesday amid optimism over some of the levies being put on hold, market participants have pointed to unease over plans for further protectionist actions at the start of April.
Asked whether tariffs would be kept for the long term, Bessent said, “We’ll see.”
Trump on Thursday downplayed the reaction in stocks, saying “I’m not even looking at the market.” He argued that foreign countries are “ripping us off” and that tariffs would put the US on a stronger footing over time. “There’ll always be a little short-term interruption. I don’t think it’s going to be big.”
“President Trump takes in a lot of information every day, and the stock market is part of it,” Bessent said. “I watch everything.”
“It’s a much-needed course adjustment,” Bessent said of Trump’s economic policies. “We’ll see whether there’s pain,” he added. “I’m confident if we have the right policies, it’ll be a very smooth transition.”
Bessent complained that the administration hadn’t got credit for the drop in energy prices in recent weeks, and reiterated that the deregulation Trump’s team is planning will boost the economy.
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out some of our webcasts.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
More Asian/European Markets Topics >
