Treasury Secretary: Inflation to Fall Despite Trump's Tariffs
1min read Treasury Secretary Scott Bessent has expressed his confidence that inflation will decline to the Federal Reserve's 2% target, despite the ongoing impact of President Trump's tariffs. In an interview, Bessent stated that he believes the recent slowdown in inflation is a temporary phenomenon and that the long-term outlook remains positive.
Bessent's comments come as the U.S. economy continues to grapple with the effects of Trump's tariffs on various industries. The tariffs, which have been in place since 2018, have led to increased costs for businesses and consumers, contributing to a rise in inflation. However, Bessent maintains that the impact of the tariffs on inflation is not as significant as initially feared.
The Treasury Secretary's optimism is supported by recent data from the Bureau of Labor Statistics, which showed that the consumer price index (CPI) rose by 0.1% in February, below the expected 0.2% increase. This marks the third consecutive month of slowing inflation, suggesting that the recent spike in prices may be abating.
Bessent also noted that the Federal Reserve's monetary policy has played a crucial role in managing inflation. The central bank has been gradually raising interest rates to combat the effects of the tariffs and maintain price stability. The Fed's actions, along with other economic factors, have contributed to the recent slowdown in inflation.
Despite the positive outlook, some economists remain cautious about the long-term impact of Trump's tariffs on inflation. They argue that the tariffs could lead to higher prices for goods and services, which could in turn fuel further inflation. However, Bessent's comments suggest that the Treasury Department is confident that the Fed's monetary policy will be sufficient to manage any potential risks.
