Secretary Bessent on Fox News’ Sunday Morning Futures

Joining me now with more exclusive interview is Treasury Secretary Scott Besson. First of all, Secretary Besson, welcome. Thank you for doing this. Much grateful. Much appreciation. I know. Larry, good. Good to be with you on your maiden voyage. Now you're back to working seven days a week like you used to in the White House. You're right about that. Thank you, sir. Anyway, Treasury Secretary Besson, I know everyone wants to talk about China and Iran, but I wanted to lead with a different subject. You've been tweeting about it. The American economy is the hottest economy in the world. Not enough people are talking about it. I try to do it every darn night. A lot of us, our RIFs, have your tweets with some important numbers on income and wealth. Manufacturing is booming. Construction is booming. Real wages are rising. Poverty has collapsed as of last year. I mean, this is a great. We don't need socialism. This is a great example of free enterprise, you know, deregulate, cut taxes, and we could be growing at 5 percent. So Secretary Besson, I just thought I'd start with that. Larry, what we're seeing now is the acceleration phase for all the hard work. As you know, we inherited a mess from the Biden administration. We righted that. We righted the ship. Many times I say I feel like an emergency room doctor treating a patient that's been backed over by a truck. And we've got the American people back on their feet, and now I think we are in the acceleration phase of this economy. The working families tax cut passed last July 4th is really kicking in. And Larry, in nature, symmetry is the most beautiful thing, and I think the beauty of the tax bill was the symmetry. On one side for business, full expensing for equipment, full expensing for factories, full expensing for ag structures. So we are seeing a boom like we have not seen for more than a decade in non-structured construction, factory building, a manufacturing boom. On the other side, the president kept his four signature promises, no tax on tips, no tax on overtime, reduced taxes on Social Security, 85% of our seniors are not paying taxes on their Social Security, and deductibility of interest on American-made cars. So more jobs, an acceleration in the economy, and Americans keeping more of what they make. It's a great setup. And the Atlanta Federal Reserve GDP now, it's a noisy number, but it is currently clocking over 5% GDP growth for this quarter. And what's important here, Larry, is that is not inflationary GDP growth. If you look at core inflation away from the volatile energy shock that we've had, core inflation has been very quiescent, and it has actually dropped over the past few months. So the energy shock is not moving into core inflation. We will get to the other side of this Iran conflict. My prediction is that oil prices will be much lower, and then we are seeing, as you said, substantial wage increases for the American people. The wage increases are going to stay. The headline inflation will come down and match core inflation. You know, Secretary, it's just very interesting. People think we can't grow like this. But really, the American economy has gone through periods when policies are incentivizing the economy. I mean, the JFK tax cuts, we grew by 5% or so for about seven or eight years. The Reagan tax cuts, we grew by 5% plus for a few years. When Bill Clinton and Newt Gingrich cut the capital gains tax in the mid-90s, we had phenomenal economic growth, about 4%. My point is, we can grow. As you say, it's not inflationary. And I don't see any end to it, whether it's data centers or, you know, factory shipments which are booming, services are booming. We got all those numbers in the last week. I don't see any end to it, Secretary. No, Larry, and it's what you and I have talked about before. It's parallel prosperity. Wall Street always does well, but now it's Main Street doing well. We're seeing a revival in small and community banks. But this comes back to the reason we can have this kind of growth is because the table has been set. Tax policy, trade policy, energy policy, and deregulation. And let me just emphasize, Larry, I think the deregulatory aspect of what this administration has done is one of the things that is powering this growth and will make it sustainable and non-inflationary. When we came in, the President told the Cabinet, for every one rule you put on the books, 12 or 13 have to come out. Well, it's been, for every one rule that went on, it's more than 120. And you see, I'm out all the time engaging with businesses, big and small, and the regulatory certainty and knowing that getting the government off their back and on side with them. And as you said, Larry, it is private enterprise that creates the real economic prosperity, not the government. The million jobs we've added this year are all private sector jobs. We've seen the federal government decrease by 300,000 jobs, and it's now being right-sized after the bloat of the Biden administration. You know, it's just, it's why I wanted to talk about it first, Secretary, because I just want to get this out. People seem to be unaware of it. It's like the greatest story never told, but we are telling the story. Now, let me ask you one related question, then we'll move on. With respect to the Federal Reserve, which has a very difficult board of governors and FOMC and so forth, are you worried that the old, you know, the old dinosaurs are saying fast growth, like 5 percent, is going to cause inflation? Are you worried that the Fed might choke this off? Larry, what I think is that with Chair Warsh, everyone asked me, what would the president be looking for with the new Fed chair? What was I looking for? And we both said someone with an open mind, because we both, the president and I both believe that we could see this kind of economic growth. And if we go back to the 90s, Alan Greenspan, the maestro, had the same situation and he let things run because he saw the improvement based on office equipment, the Internet productivity. We're probably having the same kind of gains, if not more substantial now. And Chair Warsh is well aware of those. I think that the board and the voters on the Fed should have an open mind because, again, it's the deregulatory aspect. We have created supply with deregulation. We got the great inflation from the Biden years because they had a demand shock that was met with supply constriction with all the regulations and the expansion of the regulatory state and their demand shock was government driven. We have a private sector demand shock and that is being met with more supply because we've deregulated. The Fed just let it alone, Secretary. Just leave it be. You know, if it ain't broke, don't fix it. It's doing very well. Well, Larry, what is regarded as one of the biggest mistakes, biggest mistakes in central banking history was summer of 08, the ECB raised rates because if you remember back then, oil was over $140. So they raised rates into a supply shock. And then we saw what happened with the financial crisis. All right, switching gears, are you satisfied with the China trade talks? Let me just note, by the way, our trade deficit with China used to be about 300 billion. It's all the way down to about 160 or 150 billion. So that's an amazing statistic, actually. Are you satisfied? Are they going to follow through? And you know, will the Chinese leave us alone? You've done such a great job. We're going to get to the Iranian economic collapse. But you know, can we trust them, Secretary Bessel? Well, Larry, I think this is the great thing about what we saw with the visit by Xi Jinping to the White House. We have a president now who the Chinese respect. And the leader's relationship drives the whole agenda. So when I'm negotiating with my Chinese counterparts, whenever I hit a dead end with them, I say, look, you are not implementing our leader's consensus. And that normally gets things moving. So it starts at the top and moves down. And I think the fact that we're going to have a historic year where the leaders of the two most powerful countries in the world meet four times, four times, that's never happened before. And each time we have more deliverables. That in Beijing, we set up the Board of Trade, we set up the Board of Investment. And as you said, this time the Board of Trade will deliver on 30 billion tariffs being removed from non-critical items. And we always tell the Chinese, we begin the discussions with, we don't want to decouple. We have to de-risk. And there are numerous industries that we have to de-risk. But in terms of non-critical items, there are things that we can sell each other. On our side, energy, ag, and on their side, low-end manufactured goods. I just want to raise a point, though, on China and Iran. General Jack Keane, he's been out saying that China's military supplies to Iran has actually increased. Intel assistance, supplies for ballistic missile programs, dual-use supplies. I mean, they're not selling oil. Iran's not selling any oil. We've basically shut that down. But is it possible that China is still making sales and somehow Iran gets cash for those sales? Again, I have great respect for General Keane, but he is mistaken here. China has substantially reduced any assistance to Iran. And I am confident, given that there's only 15 million more barrels of Iranian oil on the water, that Iran will have nothing left to trade for anything. They will have nothing to trade for anything. Probably within the next two weeks, they are going to make their final deliveries of oil to China, and then they will have nothing. It is an empty set, and I believe that they are feeling the pressure here, and that's why they want a deal. And you saw when President Trump was leaving the White House this morning that the Iranians say they'll open the straits within seven days. Larry, the straits are open. If you take out the Iranian oil, which we're not letting out, we're not letting it out, that we're averaging now 15 to 22 million barrels a day. It was at about 20 pre-conflict. So you take out the one and a half or two Iranian barrels. So think of it this way, Larry. The score is the United States, one billion, more than one billion barrels have gotten out. Iran, zero. That's right. You know, I call you, I continue to call you the best wartime Treasury Secretary since World War II, and I think it's a great story. Last point here, you've shut them down, their offshore banks, the sanctions, the assets, and I'm reading they can't even trade internally, Scott. They're having, you know, Turkey's moved away and Azerbaijan has moved away. Trucks are just on the border, but they can't transfer the goods. Tell us more. I mean, this could be the coup de grace. They literally can't get their hands on any goods. And of course, they're not paying the salaries of the Revolutionary Guard. Well, Larry, this all started, if you recall, spring of 2025, you interviewed me at the Economic Club of New York. And I said that we were going to begin exerting maximum pressure on the Iranian regime. The reality was at 800,000, now it's practically worthless. It's 2.4 million. So it's collapsed. And Operation Economic Outcast is something that the world has never seen in terms of isolating a rogue regime. But keep in mind, Larry, this is sequencing. So we had six weeks of kinetic activity. They have no Air Force. They have no Navy. We substantially destroyed much of their missile and drone capability. But more importantly, 85 or 90 percent of their factories. Now we have what President Trump calls the wall of steel, the blockade. Nothing is going in or coming out. Importantly, on nothing coming in, can you imagine, Larry? Iran has third most energy assets in the world, but they have to, because of the neglect over the past 47 years, they have to import gasoline. So now there are gasoline lines. Then our Operation Economic Outcast, and I will tell you that our partners have been great. We have shut down three banks. And we tell everyone, we know who you are. You know who you are. And we have people's attention. We have many more new authorities now, whether it's on crypto, on the airlines, maritime. And we are enforcing those. We've shut down the Iranian airlines. They are isolated from the world. They are a pariah state. And my job is to make sure that when they come with a deal, that they want to stick to it. They did not stick to the MOU. And next time, if there is a deal that's at President Trump's discretion, that they will stick to it, because they are on their knees. All right. I know you're busy. We'll leave it there. You're doing the Lord's work. Spectacular stuff. Treasury Secretary Scott Bessin, appreciate your time on a Sunday morning. Appreciate it very much. Larry, great to see you. Thank you.