Economic Outlook and Growth Projections
US Treasury Secretary Scott Bessent made noteworthy assessments of the American economy during his appearance on the Face the Nation program on CBS News. Bessent, stating that the economy is “in better shape than they expected,” stated that they expect 3 percent real GDP growth by the end of 2025. Addressing President Donald Trump's discomfort with media criticism, the minister argued that the economic outlook is more positive than previously thought, saying, “Real incomes increased by about 1 percent.”
Bessent said holiday shopping was strong and that Trump's warnings of price increases months ago hadn't materialized. However, when asked about criticism of toy price increases, he said inflation was largely driven by the service sector and that price increases for imported goods were lower.
Inflation, Purchasing Power, and Media Influence
When reminded that the poll found that 60% of Americans believe Trump's inflation statements are better than they actually are, and that the president's approval rating on the economy has fallen to 36%, Bessent suggested this was due to media rhetoric. “There are two components to purchasing power: inflation and real income. Real incomes are rising,” he said, arguing that the Biden administration has inherited a “legacy of embedded inflation.”
Bessent stated that energy and regulatory shortages have fueled inflation during the Biden administration. He noted that, according to his calculations, the “ordinary person index,” which reflects the working class, has fallen below the general inflation rate for the first time. He added that he predicts inflation will fall even more sharply in 2026.
Food Prices and Agricultural Trade with China
When asked about criticism of food prices, Bessent acknowledged that grocery prices remain high, but argued that President Trump's launch of a “price-gouging investigation” over high beef prices was not consistent with the Biden administration's policies. “They didn't do it right, we'll do it right,” he said.
Bessent also addressed the agricultural agreement with China, stating that China had committed to purchasing 12.5 million tons of soybeans and that prices had increased by 12-15 percent since the agreement. However, he stated that China would not accelerate its purchases and was proceeding according to the schedule set out in the agreement. When reminded that the USDA was preparing a “bridge payment” for short-term support for farmers, Bessent explained that this was due to delays stemming from China's use of farmers as leverage in negotiations.
The "Trump Accounts" Initiative
The program also featured the newly announced “Trump accounts.” Under this plan, the federal government will open a $1,000 investment account for every US citizen born between 2025 and 2028. These accounts will be invested in a low-cost index fund, and children will be able to use the money or save for retirement when they turn 18.