Treasury Secretary Scott Bessent Lives In A Financial Bubble. Or As Kellyanne Conway Would Say, An ‘Alternate Reality’

Apr 7, 2025 12:19 PM EDT, Mon

Treasury secretary interview offers timely reminder: There are no adults in the room

Many hoped Treasury Secretary Scott Bessent would be a voice of reason on Team Trump. Amid the crisis caused by tariffs, those hopes have since evaporated.

April 7, 2025, 8:52 AM EDT By Steve Benen

On Wednesday afternoon, shortly after stock market trading had wrapped up for the day, Donald Trump kicked off a trade war with sweeping international trade tariffs. On Thursday, Wall Street followed international markets off a cliff.

It was at that point that Treasury Secretary Scott Bessent said, in apparent seriousness, that the two developments might’ve been unrelated.

“For everyone who thinks these market declines are all based on the president’s economic policies, I can tell you that this market decline started with the Chinese AI announcement of DeepSeek,” Bessent told far-right media personality Tucker Carlson, in an interview that was released on Friday.

Two days later, as NBC News reported, the Cabinet secretary kept talking, though he hardly made matters any better.

In an interview with NBC News’ “Meet the Press,” Bessent called it a “false narrative” that people who are close to retiring may be reluctant after their retirement savings may have dropped last week because of the stock market downturn. “I think that’s a false narrative,” he told moderator Kristen Welker. “Americans who want to retire right now, the Americans who put away for years in their savings accounts, I think they don’t look at the day-to-day fluctuations.”

Perhaps Bessent should have conversations with a wider range of people — because there were countless Americans looking at the “day-to-day fluctuaqtions” in their retirement accounts last week.

In the same interview, the treasury secretary — ostensibly one of the most powerful and influential figures on the planet when it comes to the economy and financial markets — told host [mKristen Welker, “[W]hat I’ve been very impressed with is the market infrastructure, that we had record volume on Friday and everything is working very smoothly. So, the American people, they can be very, take great comfort in that.”

Why would Americans take “great comfort” in the fact that trillions of dollars of wealth disappeared “very smoothly”? I’m not sure, though Bessent delivered the line as if he believed it made sense. It did not.

Stepping back, it’s worth emphasizing that Bessent was hardly seen as a controversial Cabinet choice for Trump. On the contrary, he was seen as one of the president’s most mainstream personnel choices for his second term, and the Treasury secretary was confirmed with more Democratic votes than most of his fellow secretaries.

Upon his confirmation, many hoped that Bessent would be a voice of reason in the Trump administration. On a team filled with cranks and charlatans, Bessent might be in a position to steer the president in responsible directions, serving as the proverbial “adult in the room.”

But those hopes have been dashed. As The Washington Post’s Catherine Rampell recently summarized in a column focused on the treasury secretary, “The ‘adults in the room’ sometimes failed in Trump’s first term. Now, they’re not even pretending to try.”

MSNBC’s Stephanie Ruhle told viewers, “My sources say that Scott Bessent is kind of the odd man out here and, in the inner circle that Trump has, he’s not even close to Scott Bessent or listening to him. Some have said to me, he’s looking for an exit door to try to get himself to the Fed, because in the last few days he’s really hurting his own credibility and history in the markets.”

Of course, if Bessent is worried about salvaging his credibility, he might already be too late.

@RalphHightower: Bessent has already tarnished his reputation by signing on with Trump. Trump is a resume killer

Home - Federal Reserve Bank of Boston
Federal Reserve Board - About the Fed
Federal Reserve Bank of New York - Serving the Second District and the Nation
Federal Reserve Bank of Philadelphia
Federal Reserve Bank of Philadelphia
Federal Reserve Bank of Cleveland
Federal Reserve Bank of Richmond
Home - Federal Reserve Bank of Atlanta
Federal Reserve Bank of Chicago
Federal Reserve Bank of St. Louis / Economic Resources & Data
Federal Reserve Bank of Minneapolis
Federal Reserve Bank of Kansas City
Federal Reserve Bank of Dallas - Dallasfed.org
Federal Reserve Bank of San Francisco

Related Posts