WASHINGTON / LONDON (IT BOLTWISE) – Despite significant economic damage caused by the longest government shutdown in US history, Treasury Secretary Scott Bessent is optimistic about the coming year. He sees no risk of recession for the entire economy, as falling interest rates and tax breaks could stimulate growth. Inflation, which is mainly caused by the services sector, is expected to be further reduced by lower energy prices.
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The longest government shutdown in U.S. history has caused $11 billion in permanent damage to the economy, according to Treasury Secretary Scott Bessent. Nevertheless, Bessent is optimistic that the US economy will grow in the coming year, as falling interest rates and tax relief could provide positive impulses. In an interview with NBC, he emphasized that while some parts of the economy, such as housing, were affected by a recession, he did not see a threat to the entire economy.
Bessent blamed the service sector, not tariffs imposed by President Donald Trump, for inflation. He expects falling energy prices to further reduce prices overall. Trump has placed increased emphasis on cost-of-living affordability in recent weeks as Democrats made gains in state and local elections and his approval ratings fell.
Kevin Hassett, director of the National Economic Council, predicts an “absolute record year” for 2026, although there could be a “hiccup” in the fourth quarter of this year due to the long government shutdown. He expects growth of 1.5% to 2% and an increase in manufacturing jobs, which could improve the scenario for 2026.
The Trump administration also plans to reduce health care costs and stimulate the economy through a series of trade deals. Bessent emphasized that the government is working on measures to control inflation and reduce the cost of living, supported by recent tax changes intended to benefit the real income levels of working Americans.
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