Treasury Secretary Scott Bessent said the U.S. economy remains strong enough to return to 3% growth by year-end, even after slower recent quarters marked by inflation, tariffs and labor-market moderation.
By yourNEWS Media Newsroom
Treasury Secretary Scott Bessent said Wednesday that the Trump administration still sees a path for U.S. economic growth to return to the 3% range before the end of the year, pointing to what he described as underlying strength in the economy as the war with Iran moves closer to an end.
In a live interview on CNBC’s “Squawk Box,” Bessent said the administration’s growth target remains achievable despite a weaker stretch for gross domestic product.
“We can have something with a three in front of it this year,” Bessent said. “The underlying economy has been strong.”
The economy has slowed over the past two quarters while facing several headwinds, including renewed inflation pressure, a labor market that had been cooling and the impact of President Donald Trump’s tariffs.
Gross domestic product increased at a 1.6% annualized pace in the first quarter. That followed a 0.5% growth rate in the fourth quarter of 2025, capping a year in which the economy expanded 2.1%.
Bessent said those figures do not change his view that the administration’s “3-3-3” plan remains possible. The framework calls for 3% economic growth, a deficit-to-GDP ratio of 3% and an increase of 3 million barrels per day in domestic oil production.
He said the economy appeared to be growing at roughly a 4% rate in February, before the United States and Israel launched their attack on Iran.
Bessent also addressed the administration’s deficit target, saying the goal is to bring the budget shortfall down enough that total debt begins falling relative to the size of the economy.
“I think by the end of the president’s term we can be at something that looks like it could have a three in front of it. What’s important about that, that’s when you start paying down overall debt as a percent of the economy,” Bessent said.
The deficit-to-GDP ratio ended 2025 at 5.8%, after remaining above 6% in both 2023 and 2024. Those levels are unusually elevated outside wartime conditions and followed years of heavy federal spending tied to the COVID-19 pandemic and its aftermath.
The federal budget shortfall reached $1.25 trillion through the first eight months of fiscal 2026, down 9% from the same point a year earlier.
High interest costs remain a major pressure point for the federal budget. Financing expenses now rank as the largest federal outlay after Social Security.
Trump has repeatedly called on the Federal Reserve to lower benchmark interest rates, arguing that rate cuts would ease the cost of servicing federal debt. The Fed has resisted further cuts this year as inflation has accelerated again.
Bessent said Trump trusts new Federal Reserve Chairman Kevin Warsh to manage monetary policy.
Trump has “every confidence” that Warsh will guide policy appropriately, Bessent said.
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