Donald Trump’s finance chief has rejected fears of a US recession despite the president’s trade war sparking a $6 trillion (£4.7 trillion) stock market collapse.
Scott Bessent, the treasury secretary, said on Sunday there was “no reason” to expect a downturn in America, claiming that the economy will remain buoyant thanks to strong job numbers, low borrowing rates and falling oil prices.
That is despite mounting fears over Mr Trump’s tariffs, which have upended global trade and rattled global stock markets.
Mr Bessent said: “I see no reason that we have to price in a recession. Markets are organic animals and you never know what the reaction’s going to be. We get these short-term market reactions from time to time.
“There doesn’t have to be a recession. Who knows how the market is going to react in a day, in a week?”
His comments come after Mr Trump told Americans over the weekend that they needed to “hang tough” during this period of turmoil.
He sought to reassure households after JP Morgan predicted tariffs would tip the American economy into recession this year.
By tearing up its growth forecasts, the Wall Street bank said US GDP is expected to shrink by 0.3pc in 2025, down from previous estimates of 1.3pc growth.
It said the chance of a global recession had also risen from 40pc to 60pc.
JP Morgan’s gloomy outlook comes after more than $6 trillion was wiped off America’s most valuable companies last week in the wake of Mr Trump’s “liberation day” announcement.
As part of his tariff blitz, Mr Trump imposed wide-ranging levies on countries around the world. This included hitting China with a headline rate of 54pc, while the UK and EU were handed rates of 10 and 20pc respectively.
Mr Bessent dismissed the markets’ negative reaction as a temporary blip, saying stock markets were for the “long term”.
“The reason the stock market is considered a good investment is because it’s a long-term investment. If you look day-to-day, week-to-week, it’s very risky,” he told NBC News.
“This is an adjustment process. We saw with President Reagan, when he brought down the great inflation and we got through the Carter malaise, there was some choppiness at that time but we are going to hold the course. This has been years in the making.”
Mr Bessent, 63, is a veteran investor and well-known in UK financial circles.
As a partner at George Soros’s hedge fund in the mid-1990s, he led the firm’s London office and played a prominent role in the fund’s notorious bet against the pound during Black Wednesday.
The wager that the pound would collapse made the firm a reported $1bn of profit.
