Trump Economic Team: "No U.S. Recession in 2026...Year of Rate Cuts"‥Dismisses 'Tariff-Driven Inflation' Claims

Bessent and Hassett Express Optimism on U.S. Economy
"Inflation Driven by Services, Not Tariffs"

The Donald Trump administration has dismissed the possibility of a U.S. economic recession in 2026, expressing confidence that it will be an "absolute blockbuster year." Addressing the recent high inflation, they argued that tariffs have had no impact, instead identifying rising service prices as the main cause. The administration also predicted that 2026 would be a year of interest rate cuts.

Scott Bessent, U.S. Secretary of the Treasury. NBC News

Scott Bessent, U.S. Secretary of the Treasury, said in an interview with NBC News' "Meet the Press" on the 23rd (local time), "I am very, very optimistic about 2026," adding, "We have laid the foundation for very strong economic growth with low inflationary pressure."

He explained that the large-scale tax cut bill, which encapsulates the Trump administration's core policy agenda and was enacted last July, will drive U.S. economic growth in earnest next year. He claimed that various tax exemptions, such as for tips and overtime pay, as well as income tax deductions for auto loan interest, would increase Americans' real incomes.

He also stated that the burden of medical expenses would be eased, announcing plans to unveil additional related policies this week.

However, he acknowledged that there are difficulties in certain sectors of the economy, such as housing and interest rates. Secretary Bessent diagnosed, "The housing sector is clearly struggling, and sectors sensitive to interest rates are in recession."

Amid rising inflation and increased living costs, he insisted that tariffs have had no effect on inflation. In September, the Consumer Price Index (CPI) rose 3.0% year-on-year, far exceeding the Federal Reserve's target of 2%.

Responding to suggestions that tariff reductions on agricultural and livestock products amounted to an admission of "tariff-driven inflation," Secretary Bessent explained that these were the results of several months of trade negotiations. He said, "If you look at the data on imported goods, the inflation rate is essentially flat, and the rise in inflation is due to the service sector," adding, "It has nothing to do with tariffs." He continued, "Inflation is a complex indicator, and we are reviewing everything to try to lower the parts we can control," and added, "If energy prices fall, inflation overall will ease."

Kevin Hassett, Chairman of the White House National Economic Council (NEC), also expressed confidence in the U.S. economic outlook.

In an interview with Fox News that day, he emphasized, "2026 will be a blockbuster year," noting, "The recent employment report was twice the expected figure, and in September and October, more than 20 major companies broke ground on new factories."

However, he projected that due to the federal government shutdown (temporary suspension of government work), fourth-quarter economic growth would be limited to around 1.5-2% compared to the previous quarter.

Chairman Hassett also said, "There is the potential for new Federal Reserve leadership that could lower interest rates," and when asked if 2026 would be a year of rate cuts, he replied, "Yes." As a candidate for the next Fed Chair, he stated, "The President will make a decision around the end of the year or early next year."

Currently, Federal Reserve Chair Jerome Powell's term expires in May 2026.