Cautioning that families are still feeling the sting of Biden-era inflation, U.S. Treasury Secretary Scott Bessent indicated that Americans can expect real affordability relief soon while forecasting meaningful progress on everyday prices, wages and housing as he touted an economy poised for a "bountiful" 2026.
"We should think that 2025 was setting the table. 2026 is going to be a bountiful year — if the Democrats don't shut down the government," Bessent said in an exclusive interview on "Mornings with Maria" Tuesday.
"There are going to be substantial refunds to working American households in the first quarter. They will change their withholding. They will get an increase in real incomes. So I am very optimistic for working Americans, for job growth, for capital formation. But we cannot let the Democrats shut down the government."
"We have the longest government shutdown in history, it was a hit to GDP, slowed things down. We're still going to finish the year probably [with] 3.5% GDP growth, which is incredible."
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The Treasury secretary made a broader case that the Trump administration’s tax, energy and immigration policies are beginning to reverse what he called the "worst inflation in 50 years," arguing that falling rents, lower energy prices and a surge in capital investment are early signs of relief.
"Affordability has two components … there [is] constraining spending and then upping revenues, which is what we're doing," Bessent started. "I suspect that we are going to see a substantial drop in inflation in the first six months of next year."
"Rents are down," he added. "The story that the Biden administration doesn't want to talk about — the mass, unfettered immigration, they have pushed up rents, especially for working Americans … So President Trump, by enforcing the border, sending home more than 2 million illegals, we're now seeing … rents coming down substantially."
Bessent said those forces, paired with an estimated $1,000 to $2,000 first-quarter tax refunds and higher real wages, position the U.S. for a major productivity boom in 2026, as long as political battles don’t derail the progress.
"The economy is broadening out. You could see it in other sectors of the stock market, away from Big Tech, [which] are doing very well. But if they try to shut down the government, I believe that the Senate Republicans should immediately forego the filibuster, keep the government open and let the economy do its thing," he argued.
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"Growth does not create inflation. The friction creates inflation, when there is more demand in the economy than supply. And … President Trump's unheralded policy is deregulation. We are creating more supply across everything," Bessent continued.
"When we see the tax refunds, when we see working Americans keeping more of their paychecks, we are going to go back to the kind of economy that we had … we're going to go back to the kind of non-inflationary growth where working Americans do better than supervised workers. Lower income households do well … Main Street, Wall Street can both do well. And my guess is both have a very good year next year."
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