GuShiio.com ① U.S. Treasury Secretary Scott Bessant predicts that inflation may quickly fall back to the Federal Reserve’s 2% target;
② Besent said that Biden’s inflation is still continuing, but under the Trump administration’s policies, inflation may return to the 2% target within 6 to 12 months;
③ Besent also mentioned that although the U.S. housing market is currently stagnant, growth is expected to accelerate in the next few weeks.
Cailian News, March 1 (Editor Zhou Ziyi)U.S. Treasury Secretary Scott Bessant said on Friday (March 1) that he expects the U.S. housing market to accelerate growth and believes inflation is likely to “quickly” fall back to the Federal Reserve’s 2% target.
“We are still experiencing Biden inflation,” Besent said in an interview on Friday. Now the Trump administration believes that former President Biden’s economic policies have pushed up consumer prices.
“Over the next 6 to 12 months, as we relax regulations, extract more U.S. energy and push to extend the 2017 tax cuts, we may soon return to the Fed’s 2 percent goal,” Besent pointed out.
Earlier on Friday, the Federal Reserve’s preferred inflation indicator showed U.S. personal consumption expenditure (PCE) rose 2.5% year-on-year in January, in line with expectations. After excluding food and energy projects, the core PCE index rose 0.3% month-on-month from December last year, accelerating 0.1 percentage points from the previous value, and the year-on-year growth rate slowed down from 2.9% to 2.6%, a record low since June 2024, in line with expectations.
Although Basent conveyed optimistic inflation expectations, market views were not entirely true. As President Donald Trump imposes tariffs on U.S. trading partners, concerns that U.S. inflation will remain sticky or even accelerate, raising concerns about long-term borrowing costs, which are also significantly higher than before the epidemic.
In an interview on Friday, Besent also talked about the troubled real estate market. Data showed that pending sales of existing homes in the United States fell to a record low in January as a harsh winter slowed activity and consumers hesitated about high home prices and mortgage rates. In addition, new housing starts also slowed in January as builders scaled back on construction of single-and multi-family homes amid growing concerns about borrowing costs and unsold properties.
However, Besent believes that “although the housing market is currently stagnant, I expect the housing market to ‘thaw’ sometime in the next few weeks.” He added that both fires in California and cold weather in the Northeast are anomalies and have affected consumer spending, and crucial spring sales are expected to rebound soon.
In addition, Besent reiterated in the interview that the government is committed to reducing the fiscal deficit and that Trump will be responsible for economic performance over the next 6 to 12 months. The finance minister expects the U.S. fiscal deficit to remain above 6% of GDP in the next few years, but he recently advocated that the fiscal deficit should be 3% of GDP.
He also pointed out that tariffs could generate considerable revenue over the next decade and are already doing so,”We are determined to reduce the deficit, let’s wait and see.”
