MW 'Corrections are healthy,' Bessent says, dismissing market worries after a dismal week

By Mike Murphy

Treasury secretary claims Trump administration is actually averting a financial crisis

U.S. Treasury Secretary Scott Bessent said Sunday that he's not worried about a market downturn, despite a miserable stretch for Wall Street.

"I've been in the investment business for 35 years," Bessent, who previously ran the hedge fund Key Square Group, said Sunday on NBC's "Meet the Press. "And I can tell you that corrections are healthy. They're normal.

"What's not healthy is straight-up, that is, euphoric markets," he continued, according to an NBC News transcript. "That's how you get a financial crisis. It would have been healthier if someone had put the brakes on in '06-'07. We wouldn't have had the problems in '08. So I'm not worried about the markets. Over the long term, if we put good tax policy in place, deregulation, and energy security, the markets will do great."

Last week, the S&P 500 entered correction territory - defined as a 10% decline from its recent peak - and the Dow Jones Industrial Average suffered its work week since March 2023. The Nasdaq Composite Index slipped into correction territory earlier this month.

Stocks gained Friday, but for the week, the Dow DJIA fell 3.1%, the S&P 500 SPX shed 2.3% and the technology-heavy Nasdaq COMP dropped 2.4%.

Read more: Stock-market bulls abandoned by Trump won't be saved by Jerome Powell and the Fed

Worries about stubborn inflation, massive federal job cuts and the risks of a global trade war have weighed on investors' minds, and consumer sentiment last week fell to a 29-month low. Bessent said Sunday that investors should not be worried about their investments or retirement savings.

"I say that one week does not the market make," he said. "We are going to have a transition. And we are not going to have a crisis." Still, he refused to rule out a recession. "You know that there are no guarantees," he told "Meet the Press" host Kristen Welker, while suggesting there will be an "adjustment" to the economy.

Read more: Wall Street begins to cut S&P 500 targets as tariff worries rock the stock market. Should investors be concerned?

"I can tell you that if we'd kept on this track, what I could guarantee is we would have had a financial crisis," Bessent said. "I've studied it. I've taught it. And if we had kept up at these spending levels, that everything was unsustainable. So we are putting the - we are resetting and we are putting things on a sustainable path."

Blaming the "reckless policies" of the Biden administration, Bessent said the Trump administration is working to reduce the U.S. trade deficit "in a responsible way."

Bessent reiterated President Donald Trump's promise of reciprocal tariffs against U.S. trade partners that will be announced April 2, but denied that tariffs on imported goods would raise prices for American consumers, as critics claim.

"They don't have to, because I believe especially with the China tariffs that China's manufacturers, they will eat the VAT, will eat the price or eat the tariffs. I believe that the currency adjusts," he said. "If we look across the spectrum, Americans will realize lower prices and better affordability."

More: Why this Wall Street strategist says investors should stick with U.S. stocks despite recession fears

-Mike Murphy

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March 16, 2025 17:36 ET (21:36 GMT)

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