Zinger Key Points
- Treasury Secretary Scott Bessent acknowledged signs of economic weakness in the United States.
- Bessent said on CNBC’s Squawk Box that the economy was "addicted" to public spending and needed a "detox period."
- Pelosi’s latest AI pick skyrocketed 169% in just one month. Click here to discover the next stock our government trade tracker is spotlighting—before it takes off.
Treasury Secretary Scott Bessent acknowledged signs of economic weakness in the U.S. on Friday, citing a necessary adjustment as the country shifts from government-driven to private sector-driven growth.
What Happened: Speaking on CNBC's Squawk Box, Bessent suggested the economy had become "addicted" to public spending and would undergo a "detox period."
His remarks referenced the administration inherited from former President Joe Biden, under whom economic growth was strong but showed signs of slowing in late 2024.
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Since taking office in January, President Donald Trump has focused on reshaping global trade and reducing the federal workforce. However, CNBC noted that concrete economic data reflecting Trump's policies remains limited.
The February jobs report showed an increase in unemployment to 4.1% and job gains below expectations. Bessent on Squak Box downplayed inflation concerns, pointing to lower oil prices and mortgage rates.
On Thursday, Bessent defended Trump’s newly announced tariffs as necessary for economic balance, while businesses expressed concerns about rising costs and potential disruptions to investment.
He also emphasized improved financial regulatory coordination, which aligns with broader efforts by the Trump administration to reduce inefficiencies in government spending.
Why This Matters: Bessent's comments this week highlight a significant transition in U.S. economic policy, as the Trump administration pivots away from government spending toward private sector-driven growth.
His remarks suggest concerns over market dependence on federal support, framing the current economic slowdown as an expected adjustment rather than a crisis. However, the weaker-than-expected jobs report and rising unemployment indicate potential headwinds.
Trump's trade policies, particularly tariffs, have raised concerns about potential supply chain disruptions, though Bessent assured Friday that they won't fuel long-term inflation.
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