Scott Bessent, the nominee for Treasury secretary by President-elect Donald Trump, recently addressed the Senate Finance Committee regarding the incoming president's proposed economic policies. Bessent expressed his belief that these policies, which include stiff tariffs, mass deportations, and deregulation, would ultimately benefit consumers by lowering costs and boosting wages.
During his testimony, Bessent stated, 'I believe that they will increase real wages and lower inflation closer to the Federal Reserve's 2% target, as (they) did during President Trump's first administration.' However, many economists have expressed contrasting views on the potential impact of these policies.
An analysis conducted by economists at Yale Budget Lab projected that Trump's plan to impose a 25% tariff on imports from Mexico and Canada, along with an additional 10% duty on Chinese goods, could lead to a 0.75% increase in consumer prices by 2025. This increase could result in a loss of approximately $1,200 in purchasing power per household, in 2023 dollars.
If confirmed, Bessent would hold a crucial position within Trump's economic team, responsible for implementing the proposed policies. These policies come at a challenging time for Americans, as they navigate a difficult housing market, consumer prices that have risen by more than 22% since 2019, and prolonged periods of unemployment for some workers.
