Bessent Reassesses Tariff Stance Amid Inflation Debate

Scott Bessent, U.S. Treasury Secretary, admitted his error regarding the inflationary impact of tariffs during a heated House Financial Services Committee hearing. Despite initial claims, Bessent acknowledged that tariffs did not exacerbate inflation but attributed rising prices to other factors. Democrats pressed Bessent on Federal Reserve independence and executive authority.

During a contentious House Financial Services Committee hearing, U.S. Treasury Secretary Scott Bessent revisited his prior assertions about tariffs causing inflation. Initially warning of inflationary pressures, Bessent retracted his statements, acknowledging that other factors, not tariffs, contributed to price hikes.

Bessent faced intense questioning from Democrats, who challenged his views on tariffs impacting commodities like coffee and bananas, which saw price increases after new tariffs were imposed by President Trump. Representative Maxine Waters led the critical examination, emphasizing the broader impact on homebuilding costs.

Furthermore, the hearing delved into Bessent's stance on the Federal Reserve's independence. Questions arose about the extent of presidential authority to dismiss Fed officials, a matter currently pending before the U.S. Supreme Court. While maintaining the Fed's independence, Bessent pointed out varied opinions within the Trump administration regarding executive power.