05-05-2025
CNBC Transcript: United States Treasury Secretary Scott Bessent Speaks with CNBC's Sara Eisen on 'Money Movers' Today
WHEN: Today, Monday, May 5, 2025
WHERE: CNBC's "Money Movers"
Following is the unofficial transcript of a CNBC interview with United States Treasury Secretary Scott Bessent on CNBC's "Money Movers" (M-F, 11AM-12PM ET) today, Monday, May 5. Following are links to video on and
All references must be sourced to CNBC.
SARA EISEN: Alright, we are joined now by the Treasury secretary, Scott Bessent, just off stage here at the Milken Conference. Such a pleasure having you.
SCOTT BESSENT: Good morning.
EISEN: So you if I had to distill your message just now, now is the time to invest in America. Is that what you're telling investors? And why now?
BESSENT: Well, the message is that the economic program is a three-part stool. Everyone's focused on trade, but there's trade, there's tax, and there's dereg. I, you were talking about it earlier.
EISEN: Yes, three prongs.
BESSENT: The three prongs. And you shouldn't look at them in isolation. So what we are trying to do, the U.S. is the best place to invest, and we're trying to accelerate that.
EISEN: As far as the tax deal, I know you're knee-deep in that, as you are in some of the trade negotiations. How do you think about the growth impact? Because some people say, oh, it's just an extension of what we have now, so we're not going to see a big stimulus.
BESSENT: Well, what's not an extension is the 100 percent expensing. So that has stepped down over the past few years. So we're going to go back to 100 percent expensing for equipment. And then a new aspect is, we're adding 100 percent expensing for the actual factory structure. So, I think that that, 100 percent expensing for equipment, 100 percent expensing for structures, along with tax certainty, and then the lower energy costs and dereg, will really accelerate the economy. And, Sara, the other thing too is, like, permanence is the, a stimulant. So once, so, the uncertainty goes away, and we are going to make the 2017 Tax Cuts and Job Act permanent. So there will be the stimulus from the permanence.
EISEN: How are you thinking about offsets? I know there's tariff revenue coming in, but the hope is, as you get deals done on trade, ultimately, there will be less of that.
BESSENT: Right. So what, you mean offsets for the stimulus?
EISEN: Paying for, for paying for the tax.
BESSENT: Yes, look, I mean, that's what a big part of the DOGE effort has been, fighting waste, fraud and abuse, and that we have found substantial the areas for cuts, the, for greater government efficiency. And, look, I think both the House and the Senate are looking for substantial savings.
EISEN: Right. Ultimately, I guess the question is, what is the expectation? You tell your former fellow colleagues and investors here at Milken, they're wondering deficit projections. We have seen what's been happening with DOGE. Clearly, you're talking up the tax cuts. What should be the correct expectations for the deficit?
BESSENT: Well, look, I think, and when I look in the mirror, I see a deficit hawk. And I tell a lot of the very eager senators and the members of Congress who want to do all the cuts this year, but let's just step back for a moment that every $300 billion is 1 percent of GDP. So, if you want to cut a trillion dollars this year, we can do it, but that's a 3 percent shock to GDP. The way to do it smartly, we're talking about bringing the deficit down by about 100 basis points every year for four years to get us back to the long-term average of 3.5 percent. And then a big cure for the deficit is upward growth shock. So, CBO scoring is at 1.7 or 1.8 percent growth, no matter whether you have a tax cut or a tax hike. So we think that, through deregulation, the permanence of the tax bill, we can get growth closer to something that looks like 3 percent.
EISEN: By end of year?
BESSENT: By this time next year.
EISEN: Where's the growth going to come from? You mentioned taxes. On deregulation, what sectors do you think are going to feel at the most and we're going to see the most stimulative impact on the economy?
BESSENT: Well, what I have been talking about is reprivatizing the economy. So, on one side, we're going to be bringing down government spending, and which has been crowding out the private sector. We're also going to be shedding excess labor on the government side. Then, on the other side, we have a substantial financial deregulatory, the agenda coming from, we put a lot of new regulators in place. So, the private sector can releverage. And we're putting a special focus on community banks, small banks, small regional banks, which were very near what I would call an extinction event in the next four or five years. So the idea is to get them lending again too.
EISEN: At the same time, we do still have this uncertainty factor around what's happening with trade. And I'm sure you hear that all the time from investors and from CEOs. How's it going on the negotiations? And when do you think we will start to see some deals?
BESSENT: I think we're very close to some deals, as President Trump said last night on Air Force One, maybe as early as this week. So, when you think about, uncertainty, a lot of it is generated by, I have asymmetric knowledge, so I'm not uncertain because I think it's going well. Other people don't have, know what I know. So—
EISEN: Well, you have to share that with us, then.
BESSENT: Well, I can say that I am highly confident that we have 18 important trading partners. We will put China to the side. The 17 other partners, many of them have approached us with the very good trade proposals. President Trump is going to be involved in all of those. He will be the final decision-maker. And we will see where that goes. But I think that, at the end of this, even if we have tariffs still in place, because the non-tariff trade barriers are coming down, because we can see an end to some of the currency manipulation, the unfair subsidy of labor and capital from the other countries, we could see the, more frictionless trade.
EISEN: Ultimately, that's the goal.
BESSENT: Well, the goal is twofold. The goal is to open the foreign markets and then bring back manufacturing to the U.S. And we're thinking about that in two ways. One is, there are strategic industries. So, during COVID, we saw that there were many strategic industries where the U.S. was woefully deficient, whether it was medicine supply chains, the—
EISEN: Chips?
BESSENT: In chips, in steel, that many of the overseas suppliers were just unreliable partners. So, we can't have that happen again. And then, on the other side, we want to bring back manufacturing and rebalance the economy.
EISEN: But China is key. I know you set it aside. And you're heavily involved here. You have said they need to de-escalate and start that process for us to get going on trade talks. Have they made any effort at this point?
BESSENT: I think that, I think we could see substantial progress in the coming weeks. We will see that as I think it's Stein's Law that which is not sustainable doesn't continue. So, 145 percent, 125 percent tariff levels are the equivalent of an embargo.
EISEN: Yes.
BESSENT: And we're reading every day what's happening with factories in China. And from an academic point of view, I can tell you that the history of trade battles, we are the deficit country. The surplus country always has the most to lose.
EISEN: Right. So, they need to make more gestures? What is it that you're looking for? And is that happening? Is there a negotiation about the negotiation?
BESSENT: Yes, we will see over the coming weeks. And we will see what President Trump wants to accept.
EISEN: Right. I mean, have they offered anything on the fentanyl, for instance, precursor ingredients?
BESSENT: The only what they have said publicly. So and I can tell you that these precursor fentanyl drugs are a real problem. There are a lot of Chinese companies. At Treasury, we have the ability to do a lot of financial surveillance. And we see Chinese corporates that are linked with the Mexican cartels. And that's got to stop. That's got to stop. Like, what is the price for these hundreds of thousands of fentanyl deaths that we have, the families that are left behind, and then the lives that are ruined?
EISEN: Right. So, when you were on a few weeks ago, we gave you a lot of grief when the market was tumbling. We saw this sharp sell-off. Now, we have seen a pretty historic comeback with nine straight up days, erasing all of the losses from the post-liberation day declines in the stock market. I'm wondering what you make of the rally and also the fact that the 10-year yield, which I know you watch more carefully, still remains a little elevated here, around 4.35.
BESSENT: Well, I mean, look, it remains elevated. It's down from January 1. It's down from January 20. Right before liberation day, about three weeks ago, it was at 3.90. So what you're saying is, it's elevated from 3.90, and everyone's saying, oh, well, Secretary Bessent got what he wanted, 10-year is at 3.90, but it's there for the wrong reason, because it's pricing in a recession. So what are we pricing in now? Are we pricing in better growth, that I'm just focused on the right economic policies, bringing inflation down. So I prefer not to talk about the market sometimes when it's volatile.
EISEN: You know it very well.
BESSENT: I get called upon. And, but we came out of the gate on January 20 with two goals, getting interest rates down 10 years lower, mortgage rate, mortgage spreads are compressed, and getting energy prices lower, and energy prices are substantially lower.
EISEN: Why should people not worry about stagflation? I know energy prices are lower, but there is, there's a little bit of concern, we saw it in prices paid-services numbers today with the tariffs coming on, that we will see flare-up of inflation at a slower growth moment.
BESSENT: Well, if I look at the Fed's favorite measure of forward inflation, one-year, one-year forward, the five-year, five-year, both of those are down the, on the year. So the inflation mark, the market isn't pricing in inflation. And then there's nothing, I haven't seen anything, there's survey data that talks about a slowdown, but the hard data continues to be resilient.
EISEN: Yes, saw it in jobs, saw it in services. Secretary Bessent, thank you for your time today—
BESSENT: Good to see you.
EISEN: In the familiar place for you here at the Milken Conference.
