Treasury Secretary Scott Bessent explains why inflation is cooling and how Trump’s tax plan could revive prosperity.
US Treasury Secretary Scott Bessent expressed optimism about consumers, saying he expects a price cut to come sooner rather than later.
“We got this affordability crisis under control. The first thing we had to do to get it under control was to stop the Biden inflation,” he continued. “Now that we’ve done that… energy prices have come down. I think house prices are a lagging indicator, especially on interest rates. So I think we could see the CPI numbers start to come down next month and the month after that.”
No economic data has been released during the federal government shutdown, but on Friday the Bureau of Labor Statistics will release its September Consumer Price Index report. Economists surveyed from Dow Jones and The Wall Street Journal expect an increase of 3.1% on an annual basis.
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US Treasury Secretary Scott Bessent speaks with members of the media outside the White House in Washington, DC on Wednesday, October 22, 2025. (Getty Images)
However, a recent University of Michigan survey found that consumer confidence for October held steady, showing little change from last month at 55, while economists polled by LSEG estimated a slight decline to 54.2. The September index was 55.1.
The survey of consumer expectations for inflation in the coming year fell from 4.7% in September to a still high 4.6%. Five-year inflation expectations remained unchanged at 3.7%.
When it comes to economic growth, data from the Commerce Department shows that gross domestic product (GDP) grew at an annual rate of 3.8% in the second quarter.
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Bessent said several changes in tax policy have not yet been fully felt in the economy.
“Part of what’s happening with the tax bill is the president’s campaign promises, which he kept: no tax on tips, no tax on overtime, no tax on Social Security, and the deductibility of auto loans for American cars. On the first three, working Americans have kept their deductions the same,” Bessent explained.
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U.S. Treasury Secretary Scott Bessent discusses the release of Israeli hostages, China’s latest hostile move against the U.S. and the ongoing fallout from the government shutdown during an appearance on “Mornings with Maria.”
“I can tell you that we will see substantial tax refunds for working Americans in the first quarter of the year. On January 1, working Americans will reset their tax withholdings and will experience a substantial increase in real income,” he added.
“It’s like Warren Buffett says: ‘When people ask you how to lose weight: eat less, exercise more. How do you manage the budget deficit? You spend less or control spending, and grow more,'” Bessent said. “If we can keep spending flat to low and grow nominally by at least 5%, perhaps even higher, then our deficit-to-GDP ratio – which ended the fiscal year at a 5, the worst short of war or recession – could make substantial progress again.”
