Is US Economy Facing Recession? What US Treasury Secretary Scott Bessent Said

US Treasury Secretary Scott Bessent has warned that some parts of the US economy, especially the housing sector, may already be in recession because of high interest rates. Speaking on CNN’s State of the Union on Sunday, Bessent said that although the overall economy remains stable, certain sectors are struggling under the Federal Reserve’s current policies.

Bessent said that high mortgage rates continue to slow down the housing market, with many potential buyers priced out. He said the real estate sector is “effectively in recession,” affecting low-income Americans the most because they have more debt than assets. Data from the National Association of Realtors shows that pending home sales in September remained flat, signaling weak demand.

Bessent criticized the Federal Reserve for not cutting rates faster, saying its policies have created “distributional problems” in the economy. His comments come after Fed Chair Jerome Powell indicated that the central bank may pause rate cuts in December.

Bessent and other Trump administration officials believe this could hurt growth and increase the risk of a broader economic downturn.

Federal Reserve Governor Stephen Miran, who temporarily serves as chairman of the White House Council of Economic Advisers, also warned that keeping interest rates too high for too long could cause a recession.

He told The New York Times that the Fed should act quickly to lower rates further, noting that inflation risks are currently under control.

Bessent said that the Trump administration’s spending cuts have already helped lower the US deficit-to-GDP ratio from 6.4% to 5.9%, helping to bring inflation down.

With inflation cooling, he said that the Fed should respond by cutting rates to ease financial pressure. “If we are contracting spending, then inflation should be dropping. If inflation is dropping, then the Fed should be cutting rates,” he said.