This weekend, Treasury Secretary Scott Bessent went on NBC News’ “Meet the Press” to discuss this issue. On the latest historic downgrade of the U.S. credit rating, it has fallen a full notch from its highest possible rating. This major breakthrough has spooked economists and federal policymakers at the same time. In the interview, Bessent characterized the downgrade as a ‘lagging indicator,’ suggesting that it reflects past decisions rather than current economic realities.
U.S. national debt stands at a staggering $36.22 trillion, per the U.S. Treasury Department. This disturbing number comes at the same time as our recent credit rating downgrade. Bessent emphasized that this downgrade would not affect how other countries, such as Qatar, Saudi Arabia, and the United Arab Emirates, perceive the U.S. economy. He stated, “If we go back to your initial question on the Moody‘s downgrade, who cares? Qatar doesn’t. Saudi doesn’t. UAE doesn’t.”
Bessent further elaborated on the collateral damage of entering into negotiations with bad faith actors. He cautioned that should these countries not come to an agreement, tariffs may return to their original listed rates. “The negotiating leverage that President Trump is talking about here is if you don’t want to negotiate, then it will spring back to the April 2 level,” he explained.
In the course of that interview, Bessent reacted to remarks former President Donald Trump made about Walmart and tariffs. When Trump himself suggested Walmart should simply “eat the tariffs,” it didn’t just surprise economists — it stopped industry leaders in their tracks. Bessent refuted having any pressure from the administration to retaliate on Walmart with respect to the tariffs. He touted his close, personal ties with Walmart’s CEO Doug McMillon.
“I just wanted to hear it from him, rather than second-, third-hand from the press.” – Scott Bessent
Bessent shared that he personally talked to McMillon about the need for Walmart to stand up against tariffs. McMillon acknowledged during an earnings call that these tariffs have increased pressure on prices but indicated that Walmart would “eat some of the tariffs, just as they did in ’18, ’19 and ’20,” according to Bessent’s remarks.
The Secretary lauded the investment agreements that were signed during Trump’s recent jaunt to the Middle East. She referred to it as an “incredible trip” and noted how often the media downplays its importance. He stated, “off ramp for many in the media not to acknowledge what an incredible trip this was.”
Despite the challenges posed by the credit downgrade and national debt, Bessent maintained a level of optimism regarding the U.S. economic landscape. He remarked, “I think that Moody’s is a lagging indicator,” reflecting a belief that credit agencies may not fully capture the dynamic nature of the economy.
In the wake of the downgrade, critics of the current administration have savaged administration’s economic management. Senator Chris Murphy (D-CT) cautioned that these trends could be a sign of an impending recession. As a consequence, he continued home or business buyers might have to pay higher interest rates.
“That means that we are likely headed for a recession. That probably means higher interest rates for anybody out there who is trying to start a business or to buy a home.” – Sen. Chris Murphy
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