Treasury Secretary Scott Bessent expects a substantial drop in inflation during the first six months of 2026, according to statements made Tuesday on Fox Business.

Bessent indicated that an announcement regarding President Trump's Federal Reserve chair selection would likely come in early January, with "one or two more Fed interviews" possibly taking place this week.

When discussing potential candidates, Bessent noted that both Kevin Warsh and Kevin Hassett are "very very qualified" for the position. He rejected suggestions that Hassett would lack agency at the Federal Reserve, while revealing that one unnamed candidate "didn't have good answer on Fed's PhD ranks" during interviews.

The Treasury Secretary expressed concerns about the Federal Reserve's standing, stating it is "an unelected institution that lost trust."

On economic matters, Bessent projected that 2025 would end with 3.5% GDP growth, adding that 2026 "will be bountiful if Democrats don't shut government." He urged Senate Republicans to "axe filibuster and keep government open."

Bessent attributed current economic pressures to "Biden inflation" but forecast relief for Americans in early 2026. He predicted tax refunds of $100 billion to $150 billion in the first quarter, potentially amounting to "$1,000, $2,000 per household."

The Treasury Secretary also linked decreasing rent inflation to border security measures, saying rent costs are "coming down thanks to closing US border."

Regarding international relations, Bessent stated that "so far China has done everything we negotiated" while asserting it's "not possible for China to continue $1 trillion trade surplus."

Bessent also mentioned that a Supreme Court ruling on tariffs is expected in early January and confirmed there are "plenty of revenue alternatives to IEEPA tariffs." He committed to reducing the budget gap by "several hundred billion USD this year."

Source: Investing.com