Treasury secretary forecasts 'detox period' for US economy

Treasury Secretary Scott Bessent said Friday the United States economy has become increasingly reliant on excessive government spending, adding, "there’s going to be a detox period.”

“The market and the economy have become hooked, become addicted, to excessive government spending and there’s going to be a detox period," Bessent said on CNBC's "Squawk Box."

Bessent added that there will be a "natural adjustment" as the Trump administration seeks to move the country toward private spending.

When asked by the host how long this economic uncertainty will last, the secretary said, "I am confident if we have the right policies, it will be a very smooth transition."

"The American dream is to be able to buy a house," Bessent said, adding that the administration is trying to "get rates down."

Financial markets slid this week in reaction to the President Trump imposing tariffs on goods from Mexico, Canada and China, and downbeat reports about consumer sentiment.

Acknowledging the situation, Trump said in his joint address to Congress on Tuesday that there would be "a little disturbance" following the new tariffs.

“Tariffs are about making America rich again,” Trump said. But first, he warned, “there will be a little disturbance, but we’re OK with that. It won’t be much.”

U.S. companies cut more than 172,000 jobs in February, according to a Challenger report released Thursday, the most in any month since July, 2020. It was also the highest number of layoffs reported in February since 2009.

Trump’s 25 percent tariffs on imports from Canada and Mexico, paired with an additional 10 percent tax on Chinese goods, went into effect Tuesday.

The president later paused tariffs on Canadian and Mexican imports covered by the 2020 U.S.-Mexico-Canada Agreement, which includes automobiles. This pause will continue until April 2, after which the taxes, and any reciprocal tariffs, would be imposed, according to Commerce Secretary Howard Lutnick.