Scott Bessent Bets on U.S. Growth Surpassing 3% Soon

U.S. Treasury Secretary Scott Bessent, a pivotal Trump administration economic advisor, said in a Bloomberg TV interview from today, that he anticipates U.S. economic growth surpassing 3% by late 2025.

He anchors this bold forecast on a strategy blending tax cuts, deregulation, and trade reforms. His vision reveals a push to boost American prosperity while tackling the deficit.

Bessent champions a “three-legged stool” of trade, taxes, and deregulation to drive growth. He predicts the 2017 tax cuts’ permanence and full expensing of capital goods will spur investment.

By Q3 2025, he expects deregulation to lift productivity, particularly in energy and AI infrastructure. Trade policy centers on tariffs, which Bessent claims will generate hundreds of billions in revenue.

He points to ongoing negotiations with 18 partners, including a UK deal and a 90-day China pause.

Scott Bessent Bets on U.S. Growth Surpassing 3% Soon

However, tariff uncertainty worries businesses, and EU talks face delays due to its 27-nation structure.

Deficit reduction remains a priority, with Bessent targeting a 3% deficit by 2028, down from 6.5–7% projected for 2026.

He relies on tariff income, drug pricing reforms, and government efficiency to cut costs. Yet, resistance from courts and Democrats could hinder savings, and past tax cuts raised deficits.

Bessent downplays bond market volatility, noting U.S. 10-year Treasury yields have fallen since January 2025, unlike rising global yields, and attributes market fluctuations to leveraged trading, not U.S. policy alone.

Financial reforms include easing the supplementary leverage ratio by summer 2025 to lower Treasury yields.

Bessent also pushes stablecoins, estimating $2 trillion in Treasury demand. Privatizing Fannie Mae and Freddie Mac is on hold, but studies aim to prevent mortgage rate hikes.

IRS modernization targets outdated systems, with Bessent eyeing savings from a $3.5 billion annual budget. He also flags Harvard’s tax-exempt status for review, citing rule violations.

These moves reflect a broader mercantile focus on efficiency and accountability.
Global trade imbalances, especially China’s manufacturing dominance, worry G7 leaders.

Bessent seeks a rebalancing where the U.S. boosts high-end manufacturing and China shifts to consumption. Middle East investments signal strong U.S. capital appeal, but tariff risks linger.

Bessent’s growth optimism hinges on swift execution, but legal hurdles and trade tensions could derail progress.

His strategy prioritizes American industry and fiscal discipline. While 3% growth is ambitious, the plan’s success depends on navigating a complex global landscape.