Treasury Secretary Scott Bessent allowed that “interest rate-sensitive sectors have been in a recession” and the government shutdown was “not helpful,” but predicted that the economy is positioned to grow in 2026. “We are going to see substantial refunds to working families in the first quarter of 2026,” he said. “Americans will change their withholding, and they will get an increase in real income.”

KRISTEN WELKER: Let me ask you big picture, Mr. Secretary. You said earlier this month, I’m going to quote you, quote, “I think there are sectors of the economy that are in a recession.” Kevin Hassett, director of the National Economic Council, said, quote, “We’re starting to see pockets of the economy that look like they might be in a recession.” Which parts of the economy do you believe have dipped into a recession? SEC. SCOTT BESSENT: Well, clearly, housing has been struggling. And the – so interest rate sensitive sectors have been in a recession. And, you know, the other thing that was not helpful, Kristen, was the longest government shutdown in history. It was 1.5% hit to the GDP, 9,500 flights cancelled. And, you know, the Democrats didn’t care that they hurt the American economy and anything to stop Donald Trump. KRISTEN WELKER: Well, big picture, is the country at risk – the entire country at risk of being in a recession? SEC. SCOTT BESSENT: No. I am very confident about 2026. Because what we are going to see is the – the president’s done peace deals, tax deals, and trade deals, the One Big Beautiful Bill. And, you know, to go back to affordability, affordability has two components. So it’s price of goods and real incomes. So under the One Big Beautiful Bill, especially for working Americans, no tax on tips, no tax on overtime, no tax on Social Security. Auto deductibility – auto deductibility on loans for American cars, that’s all kicking in. Americans have not changed their withholdings. So we are going to see substantial – substantial refunds to working families in the first quarter of 2026. Americans will change their withholding, and they will get an increase in real income. The trade deals that we’ve done, I was just at home town, Charleston, South Carolina. Boeing is expanding their Dreamliner plant, 1,000 new jobs. And I think we’re going to see these plant openings every week. I am very, very optimistic on 2026. We have set the table for a very strong non-inflationary growth economy.

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