CNBC's full interview with Treasury Secretary Scott Bessent

[00:00:00] Speaker 1: Let's begin though with a special guest, I guess you'd call him almost the keynote speaker, Treasury Secretary Scott Besson. Mr. Secretary, thank you for gracing us today, even though I'm [00:00:11] Scott Besson: out. I wish you could be here. Joe, good to see you and thanks for getting up so early. [00:00:17] Speaker 1: Yeah, you are. And work with me on this if I get a little groggy or my questions don't make any sense. You do have some news this morning for us. I think it might relate to what we've seen in various states around the country and maybe with Doge and elsewhere. But there's a new initiative from the Treasury's Financial Crimes Enforcement Network for whistleblowers that can actually be compensated if they come forward. Why wasn't this done before? It seems like a no-brainer. [00:00:49] Scott Besson: I don't know, Joe, but it's very exciting. I think it's going to be a great way to ferret out waste, fraud and abuse, starting in Minneapolis, which has been ground zero. So we are encouraging whistleblowers who know about fraud, people who are stealing from the American taxpayer to come forward. At Treasury, we're setting up a website and we will be giving rewards up to 10 to 30 percent of the fines that we [00:01:18] Speaker 1: levy. So what are, go into some of the things that you're talking about. What type of tips are you looking for surrounding what type of fraud and abuse? Again, anything that has to do with government [00:01:35] Scott Besson: programs where there's a lack of common sense. What we saw in Minneapolis were daycare centers without children. The programs where they're claiming that 80 percent of the children in the programs had autism, public or senior transport companies with no vehicles. So, you know, it's kind of like they say at TSA, if you see something, say something. And if you say something and it turns out that you have helped us make a big recovery, we want to pay for that. [00:02:14] Speaker 1: And it's FinCEN.gov slash whistleblower. And who's eligible? Anyone in the United States? I guess, [00:02:21] Scott Besson: where will the money come from to pay out? Again, it's going to come from the recoveries that we get, the fines we let, the fines we levy. And again, you know, we want to call this back for the American people. These Minneapolis numbers are astounding. They keep getting bigger and bigger. The lack of oversight. Attorney, Minnesota Attorney General Keith Ellison was in front of Congress yesterday. And I thought he gave some very unsatisfactory answers. And it seemed like, from what I saw, that there was a circular system where people were stealing from the federal government, then donating back to politicians. [00:03:04] Speaker 1: Secretary, let's shift the ears to something everyone's watching closely. Obviously, Kevin Warsh, the president would like to have him confirmed in a timely manner. And there are some obstacles in one, Senator Tillis. I think you proposed, I guess you'd call it an off-ramp, some type of an off-ramp, if the investigation would move from justice to the banking committee. I can't tell. I'm looking at what his comments are. He says, well, yeah, we could certainly have some type of investigation, but that would not replace the investigation for the DOJ being, that needs to be dropped first. Do you know where we stand on that, how this is going to play out? [00:03:53] Scott Besson: Yeah. Again, Joe, the administration has no influence on what the U.S. attorney for D.C. does. What I was proposing was that the Senate Banking Committee also investigate this very large overrun on the Fed construction project. We'll see where the investigation goes with Jeanine Pirro's office. There were subpoenas issued, but that doesn't have to mean that there are charges. They reached out to the Fed in December via email, didn't get responses, and then issued subpoenas. So we'll see what the state of that is. I think what's important here is that at this, I spoke on Tuesday at a Republican Senate working group, and what I think is important, my understanding is that we are going to proceed with the hearings. Senator Tillis wants to keep a hold on any vote with Kevin Warsh leaving committee, making it to the full Senate. But I think it's important to get the hearings underway, and I think we have an agreement to do that. [00:05:07] Speaker 1: I think Senator Scott has weighed in as well. Do you agree that the Justice Department may have overstepped in this? I guess you may not want to weigh in on what the DOJ does, but there are a lot of people just intimating it's a pretext just to try to force the Fed and J-PAL to lower rates. [00:05:31] Scott Besson: Again, Joe, I'm not going to comment on the ongoing Justice Department investigation, but I will point out Senator Scott, my home state senator, who I'm very close to, did say that J-PAL is guilty of one thing, incompetence. And this building project is out of control, way over budget, and the Fed, unlike other branches of government, does not work on appropriations. They have magic money. So when they go over budget, they just print more money. And I'll remind you of your viewers that due to some terrible bond market purchases, the Fed's losing $100 billion a year. [00:06:14] Speaker 1: Did we know that the Senate was ready, the committee was ready to move ahead? Is that, that, so you just confirmed that that is the case? [00:06:23] Scott Besson: That, that is my, that, that's my belief that what was settled, what came out of the meeting I was at on Tuesday. So I think we can move ahead with the hearings and Senator Tillis will exercise his right to hold up a vote. But I think it is important that we get to the hearings. Chair Powell, term as chair, ends mid-May. And anyone who cares about the integrity, the independence of the Fed is going to want to see continuity with Kevin Warsh. He's a great candidate. Last time he was voted on for governor, he received a voice vote and he got 100% of the votes. And unbelievably, he was sponsored by his home state senator, Chuck Schumer. We can see how things have changed since then, Joe. [00:07:16] Speaker 1: Yeah, that's, that's an understatement. Before we move on to that jobs report, which was better than expected, there's, there's some news out this morning, um, Mr. Secretary, is, is the, the team, the Trump team working to narrow the scope of some of those metal tariffs? I think it was 50% at one point. I directed at China, but, but there were maybe some, uh, some collateral damage. Do you, can you shed any light on, on whether, uh, there are things going on behind the scenes that would, you know, that would, you know, make the EU feel a little bit better? [00:07:48] Scott Besson: Uh, so Joe, I, I'm not going to get out ahead of, ahead of the president here. I spoke to, uh, USTR ambassador, Jameson Greer, uh, on my way into the studio this morning. And, you know, we'll, we'll see if there's kind of a, a narrowing. My understanding is if anything is done, and I don't think it's great reporting that we saw today. If anything is done, I think it would be sort of clarification on, on some incidental objects, but again, that's going to be the president's decision. I don't think we have great reporting this morning. [00:08:23] Speaker 1: Mark, it wasn't so great, uh, yesterday. That's a great this morning, but 50,000, uh, Mr. Secretary, 130,000 jobs, uh, you know, more than double what was expected, 4.3% unemployment, closed border. What, what, what is wrong with the mood of the country? What are, what are people feeling that, that have some polls showing that people miss Joe Biden's economy? What, how does that work? Where's, where's the disconnect? [00:08:49] Scott Besson: Uh, I, I, again, Joe, you know, what was even more impressive about the numbers is the, the private sector numbers were more than 170,000, and government jobs were reduced by more than 40,000, more than 30, uh, 30,000 of that was federal jobs. We're at the lowest, uh, ratio of government jobs to total jobs since 1966. And this is part of President Trump's plan to reprivatize our economy. And I, I think, as I've said many times, 2025 is about setting the table. Uh, 2026 is going to be a, a banquet for the American people. Uh, the economy is taking off. We saw 40,000 new construction jobs. Everyone says to me, oh, where are these factory jobs that you planned? And, uh, unlike what you and I see in the financial market, you can't push a button and build a factory. There's lead time. But what we are seeing is big, big commitments to these factories that are going to be built. First, we'll get the construction jobs and then the factory jobs are going to come. So we're, I think we're going to see the tremendous ground breakings. I think we're going to see a lot of factory completions this year. And I, I think thanks to the work and families tax cut on one side of the balance sheet, we are seeing corporate CapEx, the surging and CapEx jobs always follow. And then on the other side, we are seeing the president's signature policies, no tax and tips, no tax and overtime, no tax and social security deductibility of American made cars. I can tell you, uh, I'm also the IRS commissioner and that tax refunds thus far, and we're very early in the season are up 22%. [00:10:34] Speaker 1: You know, Mr. Secretary, with an election coming, you, you will see, um, maybe not feet of clay, but you're going to see some members of the Republican caucus, uh, thinking about what, what happens in November. I don't know if that's how you tie this tariff, uh, how you tie the tariff vote and what the point is, because it's probably going nowhere, but the, the deficit itself, uh, in getting to down to 3% where you'd like to get the, the deficit to GDP ratio, do you trust these CBO numbers or do you think that growth is being underestimated? Because if the tariffs, they do point out the tariffs do offset some of what the big, beautiful bills, uh, provisions do to widen the deficit. I mean, maybe there's on the other end, there's growth that's going to come from a lot of those, uh, programs. But in the meantime, the deficit widens offset by tariffs. So why don't some of your, the Republicans in Congress see that that's a rationale? [00:11:36] Scott Besson: Uh, well, Joe, look, uh, the, the, the CBO missed what went on last year. So if they can't do the near year, how can they do 10 years out? Uh, and it, they're, they're, they're a static scoring system, uh, and it, it's, I, I, I don't know what they're thinking because they assume GDP growth is 1.7, 1.8%. If we'd had the biggest tax hike in history, uh, they would have assumed that if we, in fact, what we did, we gave the biggest tax cut in history and we'll never have to talk about these tax cuts again, because, uh, thanks to president Trump's leadership, Mike Johnson, leader Thune, uh, there, we now have great permanence. We have great certainty. So, you know, I'm not sure what the CBO is saying. And for just to give your viewers some context, Joe, 2024 deficit to GDP was 6, 6.97% 2025 went all the way down to 5.4%. That's constraining spending and growing the denominator. So when we have hot, high growth, the, then the deficit, the GDP comes down and that's how we pick pay down this debt interest rates. We had the 10 year bond did the best, uh, that it had since 2020 last year. We were the best performing G7 economy in the bond market. And one of the reasons that the bond market has been so tame is because we are getting our fiscal house in order. So, you know, I will take the market over the CBO any day. [00:13:14] Speaker 1: Can we just touch on China quickly? I know you're going to meet with, uh, the vice premier in the next few weeks ahead of the, uh, the president's, uh, visit, uh, to China. Is this, uh, the same thing you've always sort of felt, uh, a, the term of fair rivalry? Or is that a little bit of a softening, this sort of an acknowledgement that these two countries, we need each other in terms of trade? [00:13:37] Scott Besson: Uh, Joe, what, what it's acknowledging is China, China's the second largest, uh, economy in the world and, you know, I, I've been very consistent when I said, we don't want to decou, we don't want to decouple, we need to de-risk and, you know, you, you just had the former commerce secretary Raimondo on and look, I, I thought she was the best of a bad group in the last cabinet, but, you know, they did nothing to de-risk, you know, what, what did they do on critical minerals? What did, what did they do on bringing back semiconductor production? What did they do on bringing back medicines? What did they do on bringing back steel to the U.S.? You know, President Trump, uh, it's, it's a dual strategy here. We want to engage with the Chinese, uh, we want fair trade, turns out, since the China shot, fair trade, uh, free trade was not fair, and, you know, our, our great American workers got wiped out. We're bringing back factory jobs, but we are going to de-risk. [00:14:41] Speaker 1: MR. SECRETARY, THE MORE -- AS TIME GOES BY, AND I THINK THINGS HAPPEN EVEN MORE QUICKLY, WE REMEMBER SOME OF THE TRANSFORMATIONAL, TECHNOLOGICAL ADVANCES IN RECENT DECADES. AI COULD DWARF, YOU KNOW, COULD DWARF THE INTERNET, COULD DWARF THE CLOUD, BUT 15% IS WHAT THE PRESIDENT SAID IN TERMS OF -- I GUESS HE'S TALKING ABOUT MAYBE NOMINAL GROWTH IF THE NEW CHAIRMAN OF THE FED WERE TO LOWER RATES. I DON'T KNOW WHETHER, OBVIOUSLY, THAT SOUNDS LIKE AN EXORBITENT NUMBER, BUT I DON'T -- I THINK WE COULD UNDERESTIMATE SOME OF THE ADVANCES WE GET FROM AI, DEREGULATION, EVERYTHING ELSE THAT HAPPENS. WHAT DO YOU THINK IS POSSIBLE? [00:15:31] Scott Besson: LOOK, I'VE SPOKEN TO THE PRESIDENT QUITE A BIT ABOUT IT. AS YOU KNOW, THE PRESIDENT IS AN OPTIMIST, AND WE SAW NUMBERS LAST YEAR, BOTH IN TERMS OF INWARD INVESTMENT TO THE U.S. ECONOMY, TENS OF TRILLIONS OF DOLLARS COMING IN. WE ARE ALSO -- THE GDP NUMBERS FOR -- WHILE PRESIDENT TRUMP WAS FULLY IN OFFICE, 4.1%, 4.1%. WE'LL SEE WHERE THE FOURTH QUARTER COMES OUT, BUT A GOOD CHANCE WILL BE AT 3% OR OVER 3%. AND, AGAIN, THAT'S A PRIVATE SECTOR ECONOMY, JOE. AND I THINK WHAT THE PRESIDENT IS LOOKING BACK AT IS WHEN YOU HAVE THESE TRANSFORMATIONAL TECHNOLOGICAL BREAKTHROUGHS BACK TO THE 1880s AND THE RAILROADS, WE COULD SEE SOMETHING THAT WE COULDN'T IMAGINE ON THE UPSIDE. I'M NOT GOING TO PUT SPECIFIC NUMBERS ON IT LIKE THE PRESIDENT, BUT, YOU KNOW, I THINK THERE'S A VERY GOOD CHANCE WE'RE SEEING THIS PRODUCTIVITY BOOM, WE'RE SEEING THIS INVESTMENT BOOM, AND, MOST OF ALL, WE'RE SEEING INFLATION COME DOWN, JOE, THIS TERRIBLE TAX THAT THE DEMOCRATS PUT ON THE AMERICAN PEOPLE, THE MOST -- THE ONEROUS TAX IS INFLATION. SO 21.5% UNDER PRESIDENT BIDEN, THUS FAR UNDER PRESIDENT TRUMP, 2.7%, AND IT IS COMING DOWN. I WOULD PREDICT THAT WE COULD BE BACK NEAR THE FED'S 2% TARGET IN THE MIDDLE OF THIS YEAR. [00:17:03] Speaker 1: THE -- SOME OF THE NUMBERS, SOME OF THE RECENT NUMBERS ON INFLATION HAVE PEOPLE WONDERING WHETHER THE FED HAS THE -- THE LEEWAY TO LOWER RATES ADDITIONALLY. I GUESS YOUR THESIS WOULD BE THAT FOR PRODUCTIVITY REASONS, AND I GUESS WE KEEP HEARING THE PRESIDENT POSIT THAT GROWTH IS NOT -- IT MIGHT BE COINCIDENTAL WITH HIGHER INFLATION, BUT DOESN'T CAUSE HIGHER INFLATION. [00:17:31] Scott Besson: WELL, JOE, I'LL TELL YOU WHAT CAUSES HIGHER INFLATION. IT'S WHAT THE BIDEN ADMINISTRATION DID. THEY CREATED A DEMAND SHOCK WITH THIS GOVERNMENT-LED TAX AND SPEND, BUT THEY CREATED THE DEMAND SHOCK WITH SPENDING, BUT THEN THIS REGULATORY BURDEN THAT THEY CREATED, THEY CONSTRAINED SUPPLY. SO WHEN YOU'VE GOT DEMAND, DEMAND UP, SUPPLY DOWN, THAT'S HOW YOU GET INFLATION. PRESIDENT TRUMP'S DONE THE OPPOSITE. HE'S CREATED -- WE HAVE A DEMAND SHOCK THROUGH THE PRIVATE SECTOR, THROUGH TAX INCENTIVES, AND CAPEX. AND THEN WE HAVE THE DRAMATICALLY DEREGULATED. WE'RE GOING TO CONTINUE TO DEREGULATE. SO WE ARE CREATING SUPPLY, WHETHER IT'S THROUGH DEREGULATION OR THROUGH ALL THE PRODUCTIVE CAPACITY THAT'S BEING PUT INTO THE ECONOMY. SO I THINK WE SHOULD HAVE AN OPEN MIND HERE THAT WE COULD SEE SOMETHING VERY SIMILAR TO WHAT WE SAW IN THE 1990S, WHEN THERE WAS ALSO A TECHNOLOGY BOOM THEN. AND WE'VE GOT TO GET AWAY FROM THIS IDEA THAT GROWTH AUTOMATICALLY HAS TO BE TAMPERED DOWN, BECAUSE GROWTH PER SE IS NOT INFLATIONARY. IT'S GROWTH THAT LEAKS INTO AREAS WHERE THERE'S NOT SUFFICIENT SUPPLY. AND EVERYTHING THIS ADMINISTRATION IS DOING IS CREATING MORE SUPPLY. [00:19:03] Speaker 1: I MENTIONED THAT THE STOCK MARKET WE DIDN'T EVEN HAVE -- WE USUALLY WOULD PRINT UP HATS. I KNOW SANTELLA HAD A 50,000, BUT IT CAME FAIRLY QUICKLY. YOU TALK ABOUT SOME GDP NUMBERS THAT WE HAVEN'T SEEN IN A WHILE. WE'VE GOT TO GET AWAY FROM THIS COUNTRY. WE'VE GOT TO GET AWAY FROM THIS. WHILE 4.3% UNEMPLOYMENT IS ALMOST FULL EMPLOYMENT, I'M STILL TRYING TO FIGURE OUT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT THAT WE'VE GOT TO FIGURE OUT. beginning of the Biden administration from all the over-regulation. What needs to happen to make Americans feel better to maybe increase the Republicans' chances of holding the House and [00:19:55] Scott Besson: Senate? Well, Joe, if the Democrats want to compete on the 2026 economy, I think Republicans, House, Senate, and local candidates, they are willing to do it. As I said, we're seeing things kick in now. But look, you know, after you've been in a massive auto pileup, you're a little skittish about driving. And Joe Biden crashed the economy. Whether it was Joe Biden, Elizabeth Warren, Kamala Harris, these policies were a disaster for the American people. As I said, 21.5 percent cumulative inflation, loss of real purchasing power. And our friend at Strategas, Jason Trinert, had something called the Common Man Index. So for working Americans, the numbers weren't at CPI. It was up in the 30s in terms of groceries, insurance, rents. And we're seeing we're bending the curve on all those. And there are two ways to fix affordability. There is bringing bringing down prices and things like energy. Energy is coming down. Energy is a core component of everything for consumers. So as that comes down, we will see the inflation levels come down. But on the other side, it's real income increases. And we've seen real, we saw real wage growth in 2025. I think it could be very strong in 2026. And I think the American people are going to start feeling it. In my career on Wall Street, I always looked to see what was performing well in the stock market to tell me about the economy. And as we've seen, there's been some volatility in big tech. But if you look at the broad indices, whether it's the equal weighted S&P or the small cap indices, they're doing fantastic. The cyclical indices are doing well. Regional banks are doing well. So that tells me the stock market is saying that Wall Street is saying that Main Street is going to have a great year in 2026. And I think the American people will feel that. [00:22:02] Speaker 1: Finally, Mr. Secretary, just an overall comment on the political environment that we find ourselves in, a complete lack of civility in some of the things I've seen. You don't pull any punches a lot of times. I've seen you recently in some interactions with senators or from the other side. There is going to be some real hardball play. Do you think, would you tell the president or Republicans to push for an end of the filibuster? Because maybe this is the last real chance to do anything before before November. I mean, the Democrats probably would get rid of it if they took the house. [00:22:48] Scott Besson: Well, Joe, the president couldn't have been more clear. I couldn't have been more clear a couple of months ago. I had an editorial in The Wall Street Journal just saying we've got to get rid of the filibuster. In game theory, the best-known game is The Prisoner's Dilemma, and it's like, who moves first? And if you have bad actors in The Prisoner's Dilemma, which the Democrats are, then you should move first. It's kind of kill or be killed. And clearly that Joe Manchin, Kyrsten Sinema, the Democrats basically had nuked the filibuster, but they refused to go along with it. And guess where they are? They're both sitting at home now, hopefully watching your show. And, you know, I think the Republicans need to be smart about this. And I think that maybe the filibuster doesn't get withdrawn for everything, but there are things that we've got to do, you know, like voter integrity. And we've got to keep the government open. I mean, look, we are on the verge of another government shutdown, and the Democrats think this is the way to hurt President Trump, but they're willing to hurt the American people. We had the biggest or the longest shutdown in history. The economy still did great because all the initiatives we put forward. But I think that we have to get on with the people's business. And if the Democrats shut the economy down again, it is a sign that they are bad actors, they don't care about the American people, and we ought to move forward, not let the government shut down, have voter integrity and many other of our signature issues. [00:24:37] Speaker 1: And I thought of one more that, you know, while we, it's not quite a half hour yet, which I really appreciate, Mr. Secretary. Crypto bills moving forward, Bitcoin, a little bit dicey here at this point. And you wonder about the leverage in the system. Any comments? [00:24:58] Scott Besson: Yeah, Joe, the history, if we take Bitcoin as a proxy for crypto, Bitcoin has a history of volatile movements. See, we went back and looked. I believe the average sell-off has been about 58 percent. And we're coming into that zip code right now. And crypto holders are mostly in it for the long term. They are used to the volatility. So it's important that everyone knows what they're buying. But part of the volatility here is self-induced because, and this is one thing where there has been a bipartisan working group. And Democrats, there is a group of Democrats who want to work with Republicans on getting a market structure bill. It's called the clarity bill. But there are a group of crypto firms who have been blocking it. They said, well, we'd rather have no legislation than this legislation. And that doesn't seem to have been good for the overall crypto community. So, you know, in a time when we are having one of these historically volatile sell-offs, I think some clarity on the clarity bill would give great comfort to the market. And, you know, we could move forward from there. So it's very important to get this done. And I think if the Democrats were to take the House, which is far from my best case, then the prospects of getting a deal done will just fall apart. I mean, look what the Democrats did to crypto under the Biden administration. It was almost an extinction event. And President Trump has worked to make the U.S. the digital asset capital of the world. There's a lot of innovation that goes on adjacent to crypto in the blockchain, in DeFi. So I think it's important to get this clarity bill done as soon as possible and on the president's desk this spring. [00:27:03] Speaker 1: Great. Mr. Secretary, as always, thank you. Thanks for all your time this morning as well. I hope to see you again soon. [00:27:11] Scott Besson: Okay, good. [00:27:11] Speaker 1: Thanks, Joe.