Scott Bessent: Fixing the Fed, Tariffs for National Security, Solving Affordability in 2026

Secretary Bessent, welcome back to All In. We appreciate you taking the time to catch up with us and provide this first year in review. We're excited to have you here and hear how things are going and what's ahead regarding the fiscal condition of the US government, the economic condition of The US economy, including how things are going for Wall Street and Main Street. And finally, we'd like to broadly discuss some of the administration's policies, decisions, and how they're playing out or will play out from your point of view. I'll start us off. And maybe to catch up on our last conversation, one of the things that I've cared deeply about and which you shared an objective around is getting the budget deficit below 3% of GDP. I'd love to hear, from your point of view how that's going and how things are looking for fiscal year twenty six, the actions that have been taken, and and what you think's ahead for that target. Good to be with you. Happy to review the year, talk about next year. There's a lot going on. I would categorize 2025. We had some important victories, some important policy announcements, some important movement. But as I described it, 2025 was setting the table. And I especially on the economy, I think the the feast and the banquet is gonna be in 2026. To start with the budget deficit, we didn't get much credit because it came out during the shutdown. The The US fiscal year is on September 30. We had a slight fiscal contraction for the year. Wasn't much, but much better than the 2,000,000,000,000 that was estimated. We came down from about 1,800,000,000,000.0 to 1.78. So a a contraction, nonetheless, for the calendar year, we're making great progress. And just to put it in context, Biden administration, they blew things out trying to get vice president Harris elected in the fourth quarter. So last year, twenty twenty four, forty percent of the government spending occurred in the fourth quarter as they, you know, had the unsuccessful or their unsuccessful attempt to convince voters that they, weren't in a world of hurt. I forecast that we will have approximately a two hundred to three hundred billion fiscal contraction, for the calendar year, which is between point 71% of GDP. We're gonna end the year with, nominal growth close to 6%. So we will be bringing down the deficit to GDP. I believe it peaked 6.8% for the calendar year previous year, and we're gonna be in the mid fives. So it's a very good start on an important journey. And I've said that I would by the time president Trump leaves office, that we would like to, have something with a three in front of it, which will stabilize the deficit, the GDP, which is an important number, and enable us to start paying down debt. Scott, it seems like the tariffs have had an enormously positive impact. It's …