Bessent’s Plausible or Pipe Dream: Inflation Will Drop Soon, the Real Estate Market Will Boom Soon

TradingKey - Although the prospect of a rebound in US inflation continues to trouble economists and the American public, US Treasury Secretary Scott Bessent said that a series of policies of Trump are expected to bring inflation back to the Federal Reserve's target of 2% soon.

Last Friday (February 28th), US Treasury Secretary Bessent said that he expected the inflation rate to continue to decline this year and it might "quickly" reach the target of 2%.

Bessent pointed out that US President Donald Trump is seeking a holistic approach, including tariffs, cuts in regulation, and cheaper energy, etc.

On the one hand, Bessent blames the high inflation that the American people are experiencing on "Biden inflation", arguing that the economic policies of the Biden administration have pushed up prices. On the other hand, Bessent is defending Trump's policies.

He predicted that within the next 6 to 12 months, as they deregulate, drill more American energy, bring certainty to extending the 2017 tax cuts, inflation will drop soon.

Bessent mentioned the real estate market that is currently being suppressed by high interest rates and high housing prices. 

Data shows that existing home sales in the US decreased by 4.9% MoM in January, and housing prices have increased for 19 consecutive months; the sales volume of houses for sale in January dropped to a record low; the annualized total number of new housing starts in January was 1.366 million units, falling short of market expectations.

Bessent said that although the US housing market is currently stagnant, it will thaw at some point in the coming weeks. He pointed out that anomalies such as the wildfires in California and the cold weather in the Northeast have restricted sales, and the spring sales in the future will improve.