If you’ve been having sleepless nights and dealing with a spike in calls from clients worried about the tanking of the equities in their portfolio recently, don’t worry.
That’s the message from US Treasury secretary Scott Bessent who says that stock market corrections, even when they have seen around $5 trillion wiped off the value of US equities in the last month, are a “healthy” part of the normal ebbs and flows of the market.
The S&P 500 rebounded sharply Friday as the correction of the previous session prompted investors to buy the dip.
Speaking on NBC’s Meet The Press over the weekend, Bessent, who is a former hedge fund manager with 35 years of experience in the industry, said that he’s not worried about the markets because they will benefit longer term from policy decisions.
“Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great,” he said, also acknowledging that there can be no guarantee of the US economy avoiding recession.
As the new week begins, Republican lawmakers are still split on whether a reform of Medicaid is the right path to achieving the extension of $4.6 trillion of tax cuts and other policy priorities. President Trump is reportedly seeking to eliminate federal income taxes for Americans earning less than $150,000, a move that could provide significant tax relief but also raise concerns over its broader economic impact.
But Bessent doubled down on the message that things will be just fine.
“We are putting the policies in place that will make the affordability crisis go down, inflation moderate and as we set the sails I am confident that the American people will come our way,” he said, adding that the American Dream is about the things people want for themselves and their families such as homes, cars, and real wage increases, not cheap imports from China.
Bessent’s comments have not gone down well with investors so far; US stock market futures dropped in early trading Monday as traders took note that the Trump administration is unlikely to be supportive of the markets. There had been expectation that the Treasury secretary would take a more pragmatic approach to keeping the markets buoyant than the president has signaled.
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