Treasury Secretary Scott Bessent on Friday acknowledged some signs of weakness in the U.S. economy.
“Could we be seeing that this economy that we inherited starting to roll a bit? Sure. And look, there’s going to be a natural adjustment as we move away from public spending to private spending,” Bessent said on CNBC’s “Squawk Box.”
“The market and the economy have just become hooked. We’ve become addicted to this government spending, and there’s going to be a detox period,” he added.
Describing the economy as inherited is a reference to the administration under then-President Joe Biden. Current President Donald Trump took office on Jan. 20.
Under Biden, the U.S. saw generally strong economic growth. However, there were signs of a slowdown in late 2024, and inflation remained above the Federal Reserve’s 2% target.
In its first few months, the Trump administration has taken steps to reshape global trade policies and to reduce the federal workforce. There has not been much hard economic data reflecting Trump’s term, though consumer surveys have shown a decline in confidence.
The February jobs report was released after Bessent’s comments and showed unemployment ticking up to 4.1% from 4.0%. The economy added 151,000 jobs during the month, below the 170,000 projected by economists, according to Dow Jones.
One area where Trump’s policies could be felt quickly are tariffs. The president has hit Canada, Mexico and China with tariffs in his first two months in office, though the Canada and Mexico efforts now have a lengthy list of exemptions. The administration plans to implement broader tariffs in April.
“Tariffs are a one-time price adjustment,” Bessent said, pushing back against the idea that tariffs would fuel continued inflation.
Bessent also said the administration was “not getting much credit” for areas where costs have fallen since Trump’s inauguration, such as oil prices and mortgage rates.
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