Treasury Secretary Scott Bessent said on Tuesday that the underlying U.S. economy is robust and that annual growth could still top 3% or even reach 3.5% this year, despite the economic turbulence tied to the U.S.-Israeli war on Iran.
Speaking at the WSJ Opinion Live event in Washington, Bessent questioned recent downward revisions to global growth and upward shifts in inflation forecasts from multilateral institutions, calling those adjustments an overreaction. The International Monetary Fund on Tuesday trimmed its growth outlook, citing energy price spikes driven by the Iran war as the key factor.
"I think the underlying economy remains strong," Bessent said. "I do think that the growth could easily exceed 3%, 3.5% this year, still."
The conflict has pushed oil prices higher and unsettled financial markets worldwide. It has also resulted in a blockade of the Strait of Hormuz. Prior to the war, roughly 20% of global oil and natural gas exports transited that waterway, a factor cited in the IMF's decision to lower its forecast.
On trade policy, Bessent addressed the future of U.S. tariffs implemented under a previous administration. He noted the Supreme Court's February ruling that President Donald Trump exceeded his authority when he imposed broad global duties under an emergency statute. As a result, the administration is exploring alternatives.
"The tariff could be back in place at the previous level by beginning of July," Bessent said, referring to options such as investigations under Section 301 of the Trade Act of 1974 that the Trump administration is pursuing.
The comments link two policy pressures facing the U.S. economy: external shocks to energy markets from the Iran conflict and domestic legal and political developments shaping trade policy. Bessent's remarks suggest confidence in the near-term strength of U.S. activity while acknowledging the channels through which the conflict has already affected global energy flows and market sentiment.
Context and implications
Bessent's remarks came amid public revisions by international institutions and growing market sensitivity to disruptions in oil supply routes. While he emphasized resilience in U.S. growth prospects, the Treasury's view contrasts with the IMF's more cautious assessment tied to higher energy costs.