Some portions of the economy are already in a recession, and others could fall into one without more interest rate cuts, Treasury Secretary Scott Bessent said on CNN Sunday.
Why it matters: For as much as the economy is actually growing — close to 4% by some estimates — the administration continues to use the specter of economic weakness to lean on the Federal Reserve to cut more, faster.
Driving the news: The Fed cut rates this week but surprised the market with a strong warning that another cut in December was not a foregone conclusion.
- Before that, investors were betting there was nearly a 100% chance of a December cut.
What they're saying: Asked if the U.S. risks a recession if the Fed doesn't keep cutting rates, Bessent told CNN's Jake Tapper, "I think we are in good shape, but I think that there are sectors of the economy that are in recession."
- "The Fed has caused a lot of distributional problems with their policies."
Flashback: Bessent's warning of an ongoing recession isn't new — last February, shortly after taking office, he said the private sector had been in recession for some time.
- But the idea that any existing recession is expanding would run counter to the strong headline growth the economy is experiencing otherwise.
Between the lines: Bessent said the Fed could solve the "housing recession" with lower rates and help lower-income consumers who have more debt than assets.
- Without that, though, he said risks would rise.
- "I think that there are sections of the economy that could go into recession," he added. He did not say which sectors, though.
What to watch: The government shutdown means key economic data isn't being collected or reported.
- It could be weeks, if not months, before there's any official indication of how the economy is actually performing.
Editor's note: This story has been updated with background on Bessent's recession comments.
