Scott Bessent Projects 3% GDP Growth By Year End, Downplays Affordability Worries Amid Rising Incomes
Scott Bessent, the Treasury Secretary made a GDP forecast for the year end, downplayed concerns about inflation, attributing the rise in prices to the service economy rather than tariffs.
3% GDP Despite Inflation
Bessent on Sunday predicted that the U.S economy would finish the year with 3% real GDP growth despite the “Schumer shutdown.”
The Treasury Secretary, in an interview with CBS News’ Face The Nation, acknowledged the rise in prices for imported goods, citing a 1.8% inflation rate. He attributed this to the service economy, which he claimed is unrelated to tariffs. Bessent also noted that real incomes have increased by approximately 1%.
When asked about the impact of inflation on the average American, Bessent blamed the Biden administration for “embedded inflation” and stated that while inflation is a concern, real incomes are also a crucial factor. He assured that the government is actively working to address these issues.
Despite the inflation concerns, Bessent highlighted a strong holiday season across all income groups.
See Also: Trump To Provide $12 Billion Aid To Farmers Hit By Tariff Policies: Report
Bessent Links Inflation To Fed Policies
Bessent’s remarks come in the wake of a contentious debate around the causes of inflation and its impact on the U.S. economy. Earlier in November, Bessent acknowledged that certain sectors of the economy were in recession, attributing this to the Federal Reserve’s policies. He also pointed to high inflation as a result of government spending during the COVID era, which the Trump Administration was cutting.
However, in September, Bessent doubled down on the potential economic upsides of tariffs, predicting significant revenue growth for the U.S. Government and a boost to the domestic economy. Before the shutdown, the Treasury Secretary had predicted the U.S. GDP to reach 5%.
Meanwhile, President Donald Trump has also been taking action to address inflation concerns, recently signing an executive order to investigate alleged price-fixing in the meat, seed, and fertilizer industries.
September Income Rises; GDP Update Delayed
According to data, personal income increased by $94.5 billion, or 0.4% in September, surpassing the expected 0.3%, fueled by higher wages and income from assets.
The U.S. Commerce Department has postponed the third-quarter GDP estimate until just before Christmas due to a backlog from the recent government shutdown.
Meanwhile, the Bank of America forecasts 2.4% U.S. GDP growth in 2026, citing fiscal support, tax incentives, favorable trade policies, stronger business investment, and delayed effects of Fed rate cuts, maintaining a more optimistic outlook than the broader market.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.