Treasury Secretary Bessent Warns Financial Crisis Narrowly Avoided, Says ‘Not Worried’ About Market Correction
U.S. Treasury Secretary Scott Bessent says that the US would be going through a financial crisis if it had kept up its spending habits.
In a new interview on NBC’s Meet the Press, Bessent says he’s not worried about the current downturn in the stock market, which has wiped out trillions of dollars in equity over the past several months, saying that a continuous parabolic ascent would’ve been more worrying.
“I’ve been in the investment business for 35 years and I can tell you that corrections are healthy, they’re normal. What’s not healthy is ‘straight up,’ these euphoric markets that tell you that you’ve got a financial crisis. It would’ve been much healthier if someone had put the breaks on in 2006-2007, we wouldn’t have had the problems in 2008. So I’m not worried about the markets. Over the long term, if we put good tax policies in place, deregulation, and energy security, the markets will do great.”
The former Soros Fund Management partner says that the US economy may undergo “an adjustment” as it migrates away from the “massive government spending” of the past. He says he can’t guarantee that there won’t be a recession, but he does say that the US is on a more sustainable fiscal path.
“There’s no reason that [there has to be a recession]. But, I can tell you that if we’d kept on this track, what I could guarantee is that we would’ve had a financial crisis. I’ve studied it, I’ve taught it, and if we had kept up at these spending levels, that everything was unsustainable. So we’re resetting and we’re putting things on a sustainable path.”
Last week, President Trump refused to rule out a recession, saying that he hates “to predict things like that.”
In an interview on Sunday Morning Futures with Maria Bartiromo, Trump was asked if he’s expecting a recession this year but declined to give a definitive answer or prediction.
“I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing, and there are always periods of…
It takes a little time. It takes a little time, but I think it should be great for us, I mean I think it should be great…
What I have to do is build a strong country. You can’t really watch the stock market. If you look at China, they have a hundred-year perspective, we go by quarters. You can’t go by that, you have to do what’s right. What we’re doing is building a tremendous foundation for the future.”
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