Treasury Secretary Bessent Rejects Debt and Tariff Concerns, Emphasizes Trump Administration's Focus on Spending Cuts and Economic Growth.

Treasury Secretary Scott Bessent dismissed concerns about rising US debt and the inflationary impact of tariffs. He stated that the Trump administration remains focused on cutting federal spending and boosting economic growth. Bessent emphasized that the administration's policies are designed to stimulate the economy and reduce the deficit, despite concerns about the nation's increasing debt levels.

United States Treasury Secretary Scott Bessent addressed the progress of US-China trade talks and dismissed concerns about rising US debt and the inflationary impact of tariffs during a recent visit to Switzerland. Bessent stated that substantial progress has been made in trade negotiations, although specific details were not disclosed [1].

In a separate development, Moody's announced a downgrade of the United States' credit rating to Aa1 from Aaa, citing rising levels of government debt and increased interest payment ratios. The downgrade reflects the growing concern over the nation's fiscal health, with Moody's projecting federal deficits to widen to nearly nine percent of GDP by 2035 [2]. This move follows similar downgrades by S&P and Fitch, who have expressed concerns over the country's fiscal performance and debt management.

Despite the downgrade, Bessent emphasized that the Trump administration remains focused on cutting federal spending and boosting economic growth. He stated that the administration's policies are designed to stimulate the economy and reduce the deficit, despite concerns about the nation's increasing debt levels. The Treasury Secretary dismissed concerns about the inflationary impact of tariffs, emphasizing that the administration's economic policies are aimed at long-term sustainability and growth.

The Moody's downgrade comes amid a tough fight in Congress to pass Trump's spending bill, which aims to extend and revamp the 2017 tax relief package. The bill, which includes deep cuts to the Medicaid health insurance program, faces opposition from several Republican fiscal hawks and Democrats concerned about the impact on low-income individuals.

References:
[1] https://www.marketscreener.com/news/latest/Treasury-Secretary-Scott-Bessent-on-US-China-Trade-Talks-49910292/
[2] https://www.france24.com/en/live-news/20250516-us-loses-last-triple-a-credit-rating-as-moody-s-cuts-on-growing-govt-debt