Treasury Secretary Scott Bessent has emphasized the unpredictability of the US economy, stating that “there are no guarantees” when it comes to avoiding a potential recession. Drawing a parallel with the unforeseen impact of COVID-19, Bessent noted that even the most robust policies can’t completely rule out economic downturns.
Bessent’s comments were made in response to concerns about the country’s economic future, particularly in light of plummeting consumer confidence and growing disapproval of President Trump’s handling of the economy. A recent NBC News poll revealed that 54% of voters disapprove of Trump’s economic policies.
Despite these challenges, Bessent expressed confidence in the administration’s efforts to implement “robust policies” that will promote durable economic growth. He highlighted the need to “wean our country off” massive government spending, which he believes will help put the economy on a more sustainable path.
President Trump has also acknowledged the uncertainty surrounding the economy, stating that “there is a period of transition” due to the significant changes being implemented. However, Trump was hesitant to predict a recession, saying “I hate to predict things like that.”
J.P. Morgan’s chief economist has estimated a 40% chance of a US recession in 2025, while Bessent believes that the current adjustment period doesn’t necessarily mean a recession is imminent. Instead, he views it as an opportunity to reset and put the economy on a more sustainable trajectory.
In terms of the stock market, Bessent expressed confidence that corrections are a normal part of the economic cycle. With his 35 years of experience in the investment business, he noted that “corrections are healthy” and that the recent downturn is not a cause for concern.
The S&P 500 index did drop into correction territory, but Bessent’s optimism was shared by J.P. Morgan’s chief economist, who believes that the probability of a recession remains relatively low. According to J.P. Morgan, the probability of a recession now stands at 35%, up from 25% in their mid-year outlook.
