Treasury Secretary Scott Bessent says Americans experienced 21.5% cumulative inflation under the last administration, "probably the worst in 50 years."
Where the previous administration called it a "vibe session" and said people didn't know how good they had it, Bessent's answer is that people were right to feel it — and that his own metric isn't sentiment surveys but what consumers actually do with their money.
"The bond market has taken out more governments than howitzers."
Bessent, who ran his own macro fund before becoming Treasury Secretary, spoke to Fox News's Bret Baier at an Economic Club of New York event, then took questions from four of the club's trustees, including IBM's chairman and chief executive.
I listened to the full interview so you can skip it. 25 minutes of audio, 12 minutes of reading.
Here are the 11 takeaways that matter.
👤 Guest: Scott Bessent, US Treasury Secretary
🎙️ Host: Bret Baier, Fox News's chief political anchor and host of Special Report, interviewing for the Economic Club of New York's "The Forum with Becky Quick" series
👥 Also on: Dambisa Moyo, chair-elect of the Economic Club of New York and co-principal of Versaca Investments; Arvind Krishna, chairman and chief executive of IBM; Deven Parekh, managing partner of Insight Venture Partners; Charles Phillips, co-founder of Recognize
📰 Published: 10 September 2026 on The Forum with Becky Quick feed
🔴 YouTube | ⏱️ 25 min | ✅ Time saved: 13 min
Key Takeaways
People were right to feel the inflation, Bessent says, and the "vibe session" framing was wrong
He puts cumulative inflation at 21.5%, "probably the worst in 50 years"
Deregulation created $3 trillion of extra bank lending capacity, by outside estimates, not his own
His elevator pitch for the administration's mission is one word: sovereignty
He calls COVID "a beta test" for what a hot war with a major power would do to supply chains
Private credit was a regulatory arbitrage, and its risk was that it couldn't restart the economy in a downturn
He's moving lending back into the regulated system so the Fed has tools to use
The bond market, not the Fed chair, is what actually disciplines a government
"Howitzers have taken out more governments... the bond market has taken out more governments than howitzers"
Trump Accounts give every child born during this term a government-seeded $1,000 index-fund account
Michael and Susan Dell have put in $6.25 billion; only 10% or less of eligible children have signed up so far
Every $300 billion of AI spending is worth 1% of GDP, and hyperscalers will spend at least $750 billion this year
He told G7 leaders the real AI risk isn't safety, it's China catching up
"The reason the Chinese are willing to have a discussion on AI is because we are ahead"
A weaker dollar and a stronger manufacturing base aren't necessarily in conflict, he argues
He points to Germany building an industrial base on a strong Deutsche Mark
Housing affordability is a rate-lock problem more than anything else, and only lower rates and more supply fix it
Institutional buyers can take up to 15-20% of some boom markets, he says, and get a tax break ordinary buyers don't
1. Reading Trump's Style
Fox News's Bret Baier opened by asking Bessent, who sees President Trump daily, to describe his management style.
Bessent described a leader who pushes constantly and knows when to stop. "President Trump is high impact, high return, high performance, and he is juggling a myriad of things. And he has a viewpoint and he pushes it. And he is very good at pushing and pushing and then knowing when to pull back."
He credited Trump with assembling a strong cabinet and White House staff, and said the president "really sweats us in terms of what he expects"
2. Bessent's Own Treasury Style
Asked how his own management style compares to past Treasury secretaries, Bessent described an operation built for speed rather than turf fights.
He said Treasury isn't the bureaucratic fight he expected. "Everyone had told me, oh, at Treasury, it's not like a typical DC department. The career staff is great, we have great politicals, people come in."
His method is delegation with a deadline. "My style is to find very smart people and give them lots of room and to have a very iterative process that at the end of the day, we only have four years"
The deregulation drive has a specific number attached, though not his own. "Not my numbers, but some outside consulting firms think that we've created $3 trillion of extra lending capacity in the regulated banking system"
He said the office deliberately tunes out Washington's news cycle, pursuing longer-term goals like maximum economic pressure on Iran, bank deregulation and passing what he called the one big beautiful bill while trying to "ignore the cycle"
3. Answering the "Vibe Session"
Asked why polling shows the public underwater on the economy, Bessent rejected the idea that people are simply misreading good conditions.
He said the previous administration blamed the public's perception rather than the numbers. "This idea, this narrative that maybe some journalist who should be ashamed said, oh, it's a vibe session. The American people don't know how good they have it. Well, the American people got torched."
He cited a specific inflation figure and called it historic. "There's 21.5 percent inflation, that probably the worst in 50 years, and a big drop in real wages."
Bessent said an index built by Jason Trennert, tracking how working families' actual spending on groceries, rent, insurance and car payments moves, showed inflation running well above the headline number for those households
His own gauge isn't sentiment, it's behavior. He said he watches what consumers actually do rather than what surveys say, and that spending has held up with no rise in credit-card delinquencies
He said real wage growth for hourly workers outpaced management in Trump's first term, and that this term's tax law — the "working families tax cut" — let 44% of this year's filers claim at least one of no-tax-on-tips, no-tax-on-overtime or the new auto-loan interest deduction, while only 15% of seniors paid tax on Social Security
He said real wages rose every month of this presidency until April, and predicted gas prices and inflation will ease "now that we are, I believe, on the other side of this conflict"
4. Sovereignty as the Pitch
Asked for an elevator pitch on the administration's economic mission, Bessent gave a one-word answer and a pandemic-era analogy.
"One is to restore sovereignty."
He's used the COVID comparison before, and repeated it here. "I have been quoted many times as saying the only good thing about COVID was it was a beta test for what could happen if we were to get into a hot war with another major nation."
The rest of the pitch: "We are bringing back critical industries, we are deregulating and letting the economy go, and we are pushing innovation and economic freedom."
5. The Long Fuse
Asked about reports of friction inside the administration, including an incident involving Bill Pulte, Bessent used a metaphor rather than addressing specifics.
"I think I've been described as having a long fuse, but when the powder keg blows, you don't want to be near it."
He compared internal disagreement to a locker room. "It's not unlike a sports team where you can have disagreements in the locker room, but when you get on the field, you want to do your best." He said the team is "pulling together very well"
6. Private Credit's Blind Spot
Asked what he's proud of that gets little coverage, Bessent turned to bank regulation and his own read of private credit.
He described himself by training rather than title. "I am proud to say that I am an economic historian, not an economist," and said studying past financial crises taught him regulators typically overreact afterward
He called private credit's growth a function of overly tight bank rules, not a free-standing innovation. "Private credit is a regulatory arbitrage." He said it's "a great new innovation" in US financial markets, but flagged a specific risk
The risk was that private credit has no restart switch. "What always worried me about private credit was that you wouldn't be able to use private credit in a downturn to restart the economy," whereas the regulated system gives the Fed chair and Treasury tools like discount-window guidance to do exactly that
He said he has met with hundreds of small and community bankers over the past year, and called reinvigorating that part of the system, "from the G-SIBs to community banks," an underappreciated part of the deregulation push
7. The Fed and the Bond Market
Asked whether new Fed Chair Kevin Warsh faces growing pressure to cut rates after holding steady, Bessent deflected to a line about markets disciplining governments.
He said he trusts Warsh's independence, which the President has affirmed. "I am confident that the Fed Chair will optimize the path for both inflation and economic growth." He said Trump told Warsh at his swearing-in that he should act independently
His framing of what actually constrains policy wasn't the White House, it was investors. "The bond market has taken out more governments than howitzers."
8. Trump Accounts, Explained
Asked about the new child savings accounts, Bessent laid out the mechanics and the philanthropic response so far.
The base benefit is a government-funded seed investment. Children born during Trump's presidential term get an initial $1,000 deposit into a low-cost index fund; parents can add up to $5,000 a year and employers can match up to $5,000, with states and foundations also contributing
Michael and Susan Dell are the largest outside donors so far. "Michael and Susan Dell, have contributed $6.25 billion. When Michael announced it, the president said, Michael, $250 million is a lot, $6.25 is really a lot." Bessent said the Dells' money is targeted at families outside the top-20%-income zip codes, working out to about $250 per child
Ray Dalio of Bridgewater has separately committed to funding accounts for children in Connecticut
Bessent frames the whole program as a financial-literacy experiment, aimed at the 38% of American households he said have no exposure to the stock market. He said sign-ups so far total about six million, which he put at 10% or less of those eligible
His stated ambition for it outlasts his own tenure. "We will look back in 20, 30, 40, 50 years... and think that this is the most important benefit for young people since the GI Bill"
9. AI's Growth Case, and China
Asked by IBM's Arvind Krishna about AI's economic potential and the case for regulating it, Bessent gave both a scale argument and a competitive one.
He sized the spending in GDP terms. "Every $300 billion is 1% of GDP. And we are seeing that the hyperscalers are going to spend at least $750 billion this year," though he noted a lot of that is imported equipment that doesn't flow directly into GDP
He invoked the 1990s internet and office-technology boom as a precedent for AI-driven productivity gains, without repeating a specific multiplier
On regulation, he said Treasury is balancing innovation against safety every day, given AI's implications for the financial system and the broader economy
His account of the G7 meeting in Évian was pointed. He said other leaders raised AI safety and job-loss risk, and "they were slightly stunned" when he told them the biggest AI risk is China getting ahead of the US
His read of China's own posture confirmed his view, he said. "The reason the Chinese are willing to have a discussion on AI is because we are ahead. So we have to stay ahead."
10. The Dollar Isn't One Thing
Insight Partners' Deven Parekh asked how the administration squares wanting a weaker dollar for manufacturing with wanting dollar strength for reserve-currency status and cheap deficit funding. Bessent said the two goals aren't in real tension.
He used Germany as his example. "I remember when Germany was an industrial powerhouse, they did it with a strong currency. And the strong Deutsche Mark constantly made them become more efficient, made them innovate, made them up their production game."
He downplayed the dollar index itself as the real target. "It's a 6.7 percent change in the dollar since last year, but I'm not looking at it. I don't wake up and think, great, it helped the economy. I just think that it's a price on the screen."
What he says actually matters is the underlying case for investing in the US — tax, regulatory and energy certainty — rather than the exchange rate reading
Where currency does bite, he said, is elsewhere. He pointed to Southeast Asian countries managing their currencies down as the more relevant threat to US manufacturing than the dollar's own level
11. Housing: Rates and Supply
Recognize co-founder Charles Phillips asked whether housing affordability is a rate problem Bessent can influence or a supply problem he can't, and whether falling rates would just reinflate demand.
Bessent called the standoff a genuine puzzle. "This housing, to quote the maestro, is a conundrum." He tied it to rate lock-in built up during years of very low mortgage rates, which has kept existing owners from selling even as prices held roughly flat through the rate-hike cycle
He said 30-year mortgage rates briefly dipped below 6% before the recent conflict with Iran, and mortgage applications picked up when they did, which he read as evidence that a specific rate threshold matters psychologically to buyers
On supply, he said the federal government's power is limited to guidance, not zoning control. He pointed to standardizing building codes — which he said still trace partly to rules written after the Chicago fire — as one lever, alongside promoting prefabricated and manufactured housing
He singled out institutional buyers as a market-moving force even at a small share. "The markets are made on the margin." He said some large aggregators may hold 15-20% of certain boom markets like Atlanta, South Carolina, Alabama and Texas, and that those buyers get a tax advantage — the ability to depreciate the properties — that an ordinary residential buyer does not
His bottom line: "It is a tough problem and it is going to take lower rates and more supply"
Bonus Insights
Asked by Dambisa Moyo what Adam Smith, marking the 250th anniversary of "The Wealth of Nations," would make of today's America, Bessent said Smith would be "astounded" at what free commerce produced, while noting Smith's own writing on the Navigation Acts shows he accepted that trade wasn't unconditionally free, especially on matters of defense
Bessent closed by naming what keeps him up at night: the scale of what has to get done in four years. "I have two children leaving the country in much better shape. I lie awake at night thinking of all the things that we need to do during our four years"
Bessent's bottom line is that the inflation shock under the prior administration was real, that deregulation and a $1,000-per-child savings program are his signature bets for the rest of the term, and that the bond market, not any single policymaker, remains the ultimate check on the government he serves.
Products, Companies & Tools Mentioned
Bridgewater Associates (Ray Dalio's firm; Bessent said Dalio has separately committed to funding Trump Accounts for children in Connecticut)
Books & Resources Mentioned
The Wealth of Nations – Adam Smith (Raised by Dambisa Moyo on the book's 250th anniversary; Bessent said Smith would be "astounded" by what free commerce built in America)
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