Whether US is heading for recession or just 'detox', downturns are costly

US Treasury Secretary Scott Bessent said on Thursday he was not concerned about recent Wall Street volatility, telling CNBC in an interview that the Trump administration was focused on medium- and long-term gains for the market and Americans.

 

Bessent, who last week said the nation's economy faces a "detox" as it shifted from government spending to the private sector, said such a transition did not necessarily mean it would enter a recession even as US President Donald Trump has not ruled it out. 

Asked if such a detox period was synonymous with a recession, Bessent said: "Not at all. It doesn't have to be, because it will depend on how quickly the baton gets handed off.

 

Our goal is to have a smooth transition." US markets have been roiled over Trump's unpredictable trade policies, including on tariffs, as investors grapple with uncertainty and escalating conflicts with trading partners that could spur inflation and hamper growth. On Thursday, main US stock indexes again slipped.

 

"We're focused on the real economy," Bessent told CNBC. "If you start looking at micro horizon, stocks become very risky. So we are focused over the medium, long-term." Investors are also watching whether Congress will pass a continuing resolution to keep the federal government operating past Friday's deadline, when spending expires. Bessent said failure to pass a spending bill would be "incredibly disruptive."