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Recently, Treasury Secretary Scott Bessent brushed off concerns about a Wall Street selloff following the White House’s trade war with Canada, China, and Mexico. Speaking on Fox & Friends, Bessent emphasized that President Trump’s main focus is improving the living standards of everyday Americans, despite market worries over the 20-25% tariffs on key trading partners.
Rebalancing The Economy
Bessent stated that, although Wall Street has been successful, the primary focus is on supporting small businesses and consumers. He highlighted that the goal is to rebalance the economy to benefit everyday Americans in the long run.
Bessent’s comments came shortly after the tariffs took effect, causing the tech-heavy Nasdaq index to drop nearly 2% in the morning, now 10% lower than its peak on December 16.
“One of the biggest wins for the American people, since election day and since inauguration, mortgage rates have come down dramatically,” he said. “The bottom 50% of Americans over the past two years have gotten crushed by these high interest rates.”
Mortage Rates See Massive Drop
Bessent said that mortgage rates have dropped significantly since Election Day and the inauguration. He believes this decline is partly due to expected bank deregulation, which could have a positive impact on the economy and mortgage rates. 30-year mortgage rates dropped to 6.76% on Thursday, the lowest in two months, down from 6.85% last week. They had peaked at a 10-year high of 7.79% on October 26, 2023, during Biden administration.
Bessent Dismises Inflation Concerns Over Tariffs
Bessent dismissed concerns that tariffs would increase inflation, pointing to Honda moving production from Mexico to Indiana to avoid them. He’s confident that manufacturers will absorb the tariffs, keeping prices steady, and believes the U.S. is in a middle of “transition” with Canada and Mexico.
Bessent explained that lower interest rates would not only help homeowners but also reduce the costs of credit cards and auto loans, which have hurt low-income Americans. “Bringing interest rates down is one of our greatest achievements so far,” he said.
He noted that while inflation is easing, it is still not back to the Fed’s target. However, Bessent remarked that affordability has been hit hard over the past few years, when asked about the impact of affordability on inflation.
