No recession risk for US economy as a whole after $14b shutdown hit: Bessent

Treasury Secretary blames the services economy, not Trump’s tariffs, for inflation

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US Treasury Secretary Scott Bessent on Nov 23 said the 43-day government shutdown caused an US$U billion (S$14.4 billion) permanent hit to the US economy, but he was optimistic about growth prospects in 2026 given easing interest rates and tax cuts.

Mr Bessent told NBC’s Meet The Press programme that parts of the US economy that are sensitive to interest rates, including housing, had been in recession, but he did not see the entire economy at risk of negative growth.

He blamed the services economy, not US President Donald Trump’s sweeping tariffs, for inflation — repeating the Trump administration’s longstanding take - and added that he expected lower energy prices to drive down prices more broadly.

Mr Trump has focused intensely on affordability in recent weeks after Democratic wins in state and local elections and his declining approval ratings - now at 38 per cent — the lowest since his return to power, according to a recent Reuters/Ipsos poll.