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Treasury Secretary Warns of Economic 'Detox' as U.S. Shifts from Government to Private Spending

Scott Bessent outlines a transition period in response to reduced public spending and new trade policies under the Trump administration.

Scott Bessent, US treasury secretary, speaks during an Economic Club of New York (ECNY) event in New York, US, on Thursday, March 6, 2025.
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Overview

  • Treasury Secretary Scott Bessent described the U.S. economy as 'addicted' to government spending, predicting a necessary 'detox period' during the shift to private sector-driven growth.
  • The Trump administration has implemented policies to reduce federal spending, including laying off over 62,000 federal workers and canceling thousands of government contracts.
  • Economic indicators show signs of slowing, with the Atlanta Fed projecting a 2.4% GDP contraction in Q1 2025 and unemployment rising to 4.1% in February.
  • President Trump has introduced tariffs on imports from Canada, Mexico, and China, with some paused until April, sparking concerns over potential supply chain disruptions.
  • Bessent expressed confidence in a smooth transition if the right policies are in place, emphasizing efforts to lower interest rates and address economic inequality.