Bessent rejects the ‘doomer view’ of the fallout of the Iran war – it affects Trump’s accounts and economic growth
WASHINGTON — Treasury Secretary Scott Bessent revealed on Thursday that six million American children have signed up for the launch of “Trump Accounts” as he dismissed what he called “temporary challenges” in the economy.
Bessent, who hosted the White House briefing, dismissed what he called a “futuristic view” of the impact of the Iran war as representing an optimistic view of the well-being of the American people, pointing to stock indexes showing all-time highs and ballooning 401k values.
In separate remarks, the Treasury secretary predicted that inflation, gas prices and the national deficit will soon decline – and said that Americans’ savings rate falling to a four-year low could actually reflect economic confidence.
“The academic literature can tell you that a lower savings rate can mean one of two things, the kind of perspective you take, or that people have more confidence,” Bessent told reporters.
“Stock market gains or 401k gains may not show up in savings, so they look at that and think they can reduce their household income.”
401k costs have increased by an average of $30,000 since Trump took office, lower drug prices through the TrumpRx platform have saved consumers an estimated $600 million and unemployment remains low at 4.3%, he said.
Bessent predicted that a deal that could end the war in Iran could quickly backfire on economic indicators, such as rising inflation that pushed the Consumer Price Index up to 3.8% in April.
“We’ve already seen oil prices drop significantly. We’re pulling more oil than we’ve ever seen before, and as I said, these are short-term challenges that we’re going to overcome,” Bessent said, predicting a “significant drop in inflation” in the near future.
Brent crude traded at around $85 a barrel on Thursday, down about 30% from late April but still up from pre-war levels.
“Oil prices dropped 10% in May. About 2,000 ships waiting to leave [Persian] Gulf, and I think the oil market will be very well supplied on the other side of this, and that we could see prices come down very quickly,” he said.
“Maybe we have something done [an Iran war] work here, and I believe the economy is challenging right now, but unemployment is still low, tax returns are high, and consumer spending is still very high. “
The former investor and fund manager cited his business background for dispelling concerns.
“In my private business over the years, I’ve always looked at what consumers do, not what they say, and I’m always in touch with banks, and every income quintile is still doing well,” he said.
“We’ve had continued and strong GDP growth. Real GDP has risen 2.6% over the past four quarters. The Atlanta Fed’s GDP is now forecast at 3.8% for the quarter.”
He said “part of our strength comes from our energy management. Natural gas is low. It’s my belief, and the futures market shows that oil will be below pre-conflict levels. We are very resistant to energy price volatility due to President Trump’s energy regime and divestment agenda.”
“Most importantly, I think we’ve got it [Chairman Kevin] Warsh Fed now. It’s a new day at the Fed,” said Bessent, hinting that he expects consideration of lower interest rates.
“I had my first breakfast with Chair Warsh this morning, and I believe he will do the right thing in balancing inflation and growth.”
Bessent also pointed to Vice President JD Vance’s anti-fraud task force as a potential benefit to the federal deficit.
“GAO’s numbers, not my numbers, believe there’s about $500 billion a year, so we can quickly get $250 billion, billion of that – the budget deficit is about $1.8 trillion – so that would significantly reduce the deficit,” he said.
“I think it will bring confidence. You probably also enter a good cycle as the budget deficit decreases, interest rates will decrease. No one is reporting, but last year we had a decrease in funds.”
‘The Shareholder Generation’
Bessent also championed the upcoming Trump Accounts campaign created by the One Big Beautiful Bill Act last year.
“Almost 6 million American children have signed up for Trump accounts, which will be launched on July 4, and I would encourage all of you to go to trumpaccount.gov to sign up,” he said.
“If your child is born during President Trump’s administration, the Treasury Department is putting in $1,000 as a seed investment. We’ve also built six learning pods, so you can go online to the app that went up today and learn.”
“I think this is going to be one of the biggest real-time financial literacy courses in history,” Bessent said.
“I think we’re going to create a generation of shareholders.”
Bessent deftly dodged hot-button questions about the law that would put Trump’s face on the new $250 bill — choosing to criticize the quality of the Washington Post’s writing — and what the exemption would mean for Iran, smartly calling out another reporter without answering.
The 63-year-old shrugged off a question about whether he might run for president — because he is the third official to host the forum while press secretary Caroline Leavitt is out on maternity leave, following Vance and Secretary of State Marco Rubio.
“I think it means they’re running out of things at the grocery store,” he joked.
