U.S. Treasury Secretary "Shutdown caused $11 billion in damage…no recession next year"

The U.S. federal government shutdown, which set a record for the longest duration in history, inflicted $11 billion in economic damage, but Treasury Secretary Scott Besent said there is no risk of a recession next year.

On the 23rd (local time), Secretary Besent told NBC's "Meet the Press" program that the shutdown caused $11 billion in permanent damage to the U.S. economy, but he was optimistic about growth next year due to interest rate cuts and tax cuts.

He said interest-rate-sensitive sectors, including housing, were in a recession, but the overall economy was not at risk of negative growth.

Secretary Besent attributed the cause of inflation to the service economy rather than to President Donald Trump's broad tariffs, and he predicted that falling energy prices would lead to overall price stability.

He said, "I'm very, very optimistic about 2026," adding, "Our economy has laid the foundation for very strong growth with (almost) no inflation."

He noted that energy prices fell in October while home sales increased, and he emphasized that efforts continue to lower inflation, currently at about 3% annually.

He expected that policy changes such as setting an overtime tax cap, reducing tip income tax, cutting Social Security tax for some individuals, and allowing deductions for auto loans would help raise the real income levels of working Americans and offset higher costs.

He added that taxpayers would receive substantial federal tax refunds in the first quarter of next year due to the rate changes.

Secretary Besent also predicted that consecutive trade agreement signings would help revive the economy and added that new factories are expected to start operations nationwide.

No Jeong-dong, Hankyung.com reporter dong2@hankyung.com