However, the secretary said there was “no guarantee” that a recession would not occur.
Treasury Secretary Scott Bescent said on Sunday that the policies launched by the Trump administration are designed to separate themselves from the financial crisis that may be the result of major government spending over the past few years, but warned that there will be no recession.
There have been concerns that recent policies such as tariffs could lead to financial crisis and recession. When asked about the recession by an NBC News reporter, Béccent said the Trump administration is working to prevent a more serious crisis and there is no reason for a recession to occur.
“There’s no reason it has to be done, but I can tell you that if we kept this track, there would have been a financial crisis that I could guarantee. I’ve studied it. I taught it, and if we had been catching up to these spending levels, everything would have been unsustainable,” Bescent said. “We’ve been reset and we’re putting things on a sustainable path.”
President Donald Trump said he hopes the government will reduce spending and eliminate waste and fraud. Earlier in his second term, he signed an order to create the Department of Government Efficiency (DOGE), led by Presidential Advisor Elon Musk, reducing spending on certain programs that were considered wasteful or fraudulent.
Meanwhile, the Trump administration issued tariffs on aluminum, steel, wood and a variety of goods, and placed 25% of the duties on all products coming from Mexico and Canada over illegal immigration and drug trafficking. Trump also put additional tariffs on products coming from China on what the Chinese administration says cannot deal with the production of fentanyl precursor chemicals that reach the US.
Over the past few weeks, US stock indices such as Dow Jones Industrial Average and Nasdaq have declined. Over the past 30 days, the Dow has dropped by about 6.4%, down more than 2,800 points, while the Nasdaq has dropped by more than 10%, down more than 2,000 points.
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When NBC was asked about the stock market decline and whether he was worried, Bescent described what was going on in the market as a “fix” that is “health”.
“I’ve been in the investment business for 35 years, and I can tell you that corrections are healthy. They’re normal,” he said. “It’s straightforward that’s not healthy… an euphoric market. That’s how you get a financial crisis. If someone put the brakes on ’06-’07, it would have been healthier.
“There would have been no issues in ’08, so I’m not worried about the market. If we put in good tax policies, deregulation and energy security over the long term, the market will be great.”
Bescent pointed to the “large government deficit” run by previous administrations, adding that the administration is cutting spending “in a responsible way.”
“We’re going to move on, and we’re not going to feel a crisis,” he said.
Responding to questions about whether a recession could occur, Bescent said there was “no guarantee,” pointing to the emergence of Covid-19 in 2020.
“Who was predicting Covid? So we can predict that we have a durable, robust policy. And there’s an adjustment? I’ll tell you, this massive government spending we had, if it continues, we’ll have to pull our country away from it,” he said. “And on the other side, we’re energizing the private sector.”
