U.S. Treasury Secretary Highlights $11 Billion Cost of Government Shutdown, Projects Strong 2026 Growth
Scott Bessent sees optimism for economic growth next year despite recession fears, citing lower interest rates, tax cuts, and declining energy prices.
U.S. Treasury Secretary Scott Bessent stated that the 43-day government shutdown dealt an $11 billion blow to the American economy but expressed optimism about next year’s growth prospects thanks to easing interest rates and tax reductions.
According to Reuters, Bessent told NBC that sectors sensitive to interest rates, including housing, experienced recession-like conditions, yet he does not see the entire economy at risk of recession or negative growth.
Regarding inflation, Bessent attributed it to the services economy rather than broad tariffs imposed by President Trump, echoing a longstanding Trump administration view. He added that lower energy prices are expected to drive broader price reductions.
Bessent Sees Strong 2026 Growth Despite Current Economic Headwinds
Trump has focused on affordability in recent weeks following Democratic wins in local and state elections and a decline in his approval ratings, now at 38%—the lowest since returning to office, according to a recent Reuters/Ipsos poll.
Despite recent data showing slower U.S. manufacturing activity due to higher prices from import tariffs restricting demand, Bessent remains positive. The University of Michigan consumer survey published Friday revealed frustration among consumers over rising costs.
“I’m very optimistic about 2026. We’ve paved the way for a very strong, non-inflationary economic growth,” Bessent said.
Energy prices fell in October while home sales increased. Bessent added that the administration continues to work to reduce inflation, currently at 3% annually. Inflation was 0.5% higher in Democrat-controlled states than Republican ones, attributed to increased regulation.
Optimistic Outlook
Kevin Hassett, director of the National Economic Council, told Fox News’ “Sunday Morning Futures” that he expects 2026 to be “very successful,” although a “hiccup” in Q4 is likely due to the longest government shutdown. He expects Q4 growth to be between 1.5% and 2%, with job gains in manufacturing supporting the 2026 outlook.
Bessent noted that last week’s reduction of food import tariffs, including on bananas and coffee, followed months of trade negotiations. “Inflation is complex, and we are examining everything, so we aim to lower what we can control,” he said.
Trump signed legislation ending the longest U.S. government shutdown in history, extending funding until January 30, while setting the stage for potential future standoffs between Democrats and Republicans.
Bessent emphasized that Republicans should immediately vote to prevent obstruction if Democrats shut down the government again—a position Trump also supports—but he avoided confirming whether there are enough votes to do so.
Political changes, such as caps on overtime taxes, lower taxes on tips and Social Security for some individuals, and deductible car loans, are expected to boost real income for working Americans, helping offset high costs. Taxpayers will see a significant federal refund in Q1 2026 due to these rate changes.
Bessent also indicated that the Trump administration plans an announcement this week aimed at reducing healthcare costs, echoing previous statements from senior White House officials, without offering further details. A series of trade deals are also expected to strengthen the economy, with new factories opening nationwide.
