No recession risk for US economy as a whole, Bessent tells NBC

By Andrea Shalal and David Lawder

WASHINGTON (Reuters) -Treasury Secretary Scott Bessent on Sunday said the 43-day government shutdown caused an $11 billion permanent hit to the U.S. economy, but he was optimistic about growth prospects next year given easing interest rates and tax cuts.

Bessent told NBC’s “Meet the Press” program that parts of the U.S. economy that are sensitive to interest rates, including housing, had been in recession, but he did not see the entire economy at risk of negative growth.

He blamed the services economy, not U.S. President Donald Trump’s sweeping tariffs, for inflation – repeating the Trump administration’s longstanding mantra – and added that he expected lower energy prices to drive down prices more broadly.

“I am very, very optimistic on 2026. We have set the table for a very strong, non-inflationary growth economy,” he said.

Bessent cited positive data for October, including a drop in energy prices and higher home sales, and said the administration was working hard to bring down inflation.

The Treasury secretary noted that inflation was 0.5% higher in Democratic-controlled states than those run by Republicans, attributing the difference to increased regulation.

Last week’s moves to cut tariffs on food imports like bananas and coffee were the result of trade deals that had been negotiated for months, Bessent said, adding, “Inflation is a composite number and we look at everything. So we are trying to push down the things we can control”.

Trump on Wednesday signed legislation ending the longest government shutdown in U.S. history that extends funding through January 30, setting the stage for another showdown between Democrats and Trump’s Republicans next year.

Bessent said Republicans should immediately vote to end the filibuster if Democrats closed the government again, something Trump has also demanded, but dodged a question on whether there were enough votes to do so.

Bessent said policy changes that cap taxes on overtime, cut taxes on tips and Social Security for some individuals, and make auto loans deductible would boost real income levels for working Americans and help offset higher costs.

Taxpayers would see substantial federal tax refunds in the first quarter of 2026 given the changes in tax rates, he added.

The Trump administration also planned an announcement this week at lowering health care costs, Bessent said, echoing similar remarks from a senior White House official last week, but giving no details.

A rash of trade deals would also help boost the economy, Bessent said, predicting new plant openings across the country.

(Reporting by Andrea Shalal and David Lawder; editing by Alexandra Hudson and Christina Fincher)