The Blubber

Treasury Secretary Scott Bessent warned on Friday that the U.S. economy has grown overly dependent on excessive government spending, cautioning that a period of adjustment lies ahead.

“The market and the economy have become hooked, become addicted, to excessive government spending, and there’s going to be a detox period,” Bessent said during an appearance on CNBC’s Squawk Box.

He added that as the Trump administration shifts focus toward private-sector growth, there will be a “natural adjustment” in the economy.

When asked how long this period of economic uncertainty might last, Bessent expressed confidence in a smooth transition—provided the right policies are in place.

“The American dream is to be able to buy a house,” he said, emphasizing that the administration is working to “get rates down.”

Financial markets took a hit this week after President Trump imposed tariffs on imports from Mexico, Canada, and China, coupled with reports indicating declining consumer sentiment.

Addressing the situation in his joint address to Congress on Tuesday, Trump acknowledged that there would be “a little disturbance” following the new tariffs but insisted it was a necessary step.

“Tariffs are about making America rich again,” Trump said. “But first, there will be a little disturbance—but we’re OK with that. It won’t be much.”

Meanwhile, U.S. companies slashed over 172,000 jobs in February, according to a Challenger report released Thursday—the highest monthly total since July 2020 and the worst February for job losses since 2009.

Trump’s tariffs—25% on imports from Canada and Mexico and an additional 10% tax on Chinese goods—took effect on Tuesday.

However, the president later announced a temporary pause on tariffs for Canadian and Mexican imports covered under the 2020 U.S.-Mexico-Canada Agreement (USMCA), including automobiles. Commerce Secretary Howard Lutnick stated that the pause will remain in place until April 2, after which tariffs and any reciprocal measures from trade partners would go into effect.