Trump's economic tightrope messaging of strong economy, high prices
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Treasury Secretary Scott Bessent speaking to Axios' Mike Allen on "The Axios Show." Photo: JaMar Jones
President Trump's economic officials acknowledge that a strong economy alone will not persuade Americans that they are better off under this president.
Why it matters: The administration is trying to avoid what it sees as a Biden-era mistake: touting strong economic data while Americans are still reeling from a historic run-up in prices to which Trump's policies have contributed.
- It is a high-wire messaging act just weeks before the midterms: The administration wants to promote strong growth without appearing to dismiss Americans' frustration over the cost of living.
- "If I say, 'Oh, people are wrong, the economy is great,' then it looks like I'm insensitive. And if I then go into why the economy is great, then it looks like I'm insensitive," top White House economist Kevin Hassett said on CNN's "State of the Union" on Sunday.
What they're saying: "What we're not going to do is do what the Biden people did and tell the American people how good they had it," Bessent told Axios' Mike Allen on Friday in a wide-ranging interview on "The Axios Show."
- Bessent said that the economy remains strong despite the recent inflation surge. "Any of the numbers are quite strong, other than headline inflation," which includes energy prices driven up by the Middle East conflict. He predicted the energy shock would "fade away."
- He acknowledged that Americans are still dealing with the cumulative hit from higher prices: "Sometimes I feel like an emergency room doctor. ... The American people were backed over by the inflation Mack Truck."
- The Treasury secretary said that wages keeping pace with inflation now isn't enough to make up for the earlier erosion in purchasing power. "Breaking even after what happened during the Biden years is not our goal."
Yes, but: The administration still wants credit for the strong economy on paper, even as the headline economic indicators obscure the financial strain Americans still feel.
- "There is the stated preference and revealed preference," Bessent said, referring to Americans' spending behavior versus their weak sentiment.
The other side: "What we did was to say, 'hey, we know you're struggling and we're trying to help with prices, but look at this good GDP or jobs report!' That talked past people," Jared Bernstein, former White House top economist under Biden, told Axios in an email.
- "What they mostly say is 'You're not struggling! And the economy's booming.' That too talks past people."
- Bernstein argued that the administration has not only dismissed affordability concerns — Trump called the affordability crisis a "hoax" last year — but worsened them through tariffs, budget cuts and the war.
The big picture: The bond market is complicating the administration's affordability push as long-term interest rates rise sharply and mortgage rates top 7%.
- Bessent has made lower Treasury yields a pillar of the administration's affordability push. A speech he gave last year had one section titled "Treasury Markets as a Barometer for Affordability."
- Speaking to Axios, Bessent played down the signal from the recent yield surge, pointing out that borrowing costs have climbed around the world.
- "I would be concerned if we were having some kind of idiosyncratic rise," he said. "It's been a global rise."
What to watch: The Treasury secretary recognized the limits of his influence on the bond market after this summer's intervention.
- "I can't control the bond market," he said. "What I can do is try to get people to slow down and think."
- Bessent said he does not regret declaring last month that "I am the house now," a reference to his informational advantage over Wall Street. "The house doesn't win every hand. The house plays percentages."
Go deeper: Watch the extended Scott Bessent interview on "The Axios Show"
