US Treasury Sec Bessent:

• Trump administration is focused on the real economy
• Not concerned about a little bit of volatility focused on the long-term.
• US government shutdown would be disruptive
• Dems would “own it” if the government shutdown
• Asked about Trumps 200% tariff threat, says not sure why one or two items from one or two trading blocs is a big deal.
• Aside from metals and likely orders, everything else is up for grabs for tariffs
• If trading partners want to ratchet things up, surplus countries will take the biggest hit
• Generally CEOs are supportive of a transitional detox.
• The Trump tax bill is no track.
• Need to get it done by this summer.
• A spending detox does not have to be a recession.
• The easist thing for us to do would have been to keep the spending trend going.
• We do have excess employment in the government.
• The US does not have a revenue problem, it has a spending problem. We are trying to get it under control.
• There are a lot of reasons why rates could come down
• Could see a surprise upside growth in Europe. CHina seems to have stabilized
• After a big surge in the dollar, it is logical that other currencies do well
• Trying to create economic certainty

Also Bessent commented that the Atlanta Fed GDP tracker would be revised higher from -2.4%. Yesterday WH Econ. Advisor Hasset suggested a similar positive GDP of +2%to +2.5% growth rate (without explanation). Bassent suggested the decline was a result of a large in flux of gold imports which will be backed out of the calculation.

This article was written by Greg Michalowski at www.forexlive.com.