Treasury Secretary Scott Bessent on Investing in America, Tax Policy, and Trade

Investing in America: A Three-Part Agenda

• 🇺🇸 The core message is that now is the time to invest in America, driven by a three-part economic program: trade, tax, and deregulation.
• 💡 The US is positioned as the best place to invest, with efforts focused on accelerating this through policy.

Tax Policy and Economic Growth

• 💰 A key component is reinstating 100% expensing for equipment and introducing it for factory structures.
• 📈 Making the 2017 Tax Cuts and Jobs Act permanent is also highlighted as a significant stimulus by removing uncertainty.
• ✅ The administration is fighting waste, fraud, and abuse to find savings and greater government efficiency as offsets for tax policies.

Deficit Reduction and Growth Projections

• 🎯 The goal is to reduce the deficit by approximately 100 basis points each year for four years, aiming for a long-term average of 3.5% of GDP.
• 🚀 A significant cure for the deficit is expected to be an upward growth shock, targeting growth closer to 3% through deregulation and tax policy.

Deregulation and Financial Sector Support

• 🏗️ The agenda includes re-privatizing the economy by reducing government spending and shedding excess government labor.
• 🏦 A substantial financial deregulatory agenda is underway, with a special focus on supporting community and small regional banks to encourage lending.

Trade Negotiations and China

• 🤝 Progress is anticipated in trade deals with 18 important trading partners, with President Trump involved in final decisions.
• 🇨🇳 Regarding China, substantial progress is expected in the coming weeks, with current tariff levels being equivalent to an embargo.
• ⚠️ The US seeks to address issues like currency manipulation, unfair subsidies, and the precursor fentanyl drug trade linked to Chinese companies and Mexican cartels.

Economic Outlook and Inflation Concerns

• 📊 While the 10-year yield remains elevated, it has decreased from earlier highs, reflecting expectations of better growth rather than a recession.
• 📉 The focus is on implementing sound economic policies to bring inflation down, with forward inflation measures showing a downward trend.
• 📈 Hard economic data continues to be resilient, despite some survey data suggesting a slowdown.