After previously suggesting that tariffs contribute to inflation, Treasury Secretary Scott Bessent walked back his comments at a contentious session before the House Financial Services Committee, where lawmakers pressed him on the economic effects of sweeping tariff policies enacted under President Donald Trump‘s administration.
Bessent’s shift marks a notable departure from an earlier view he expressed prior to joining the Treasury that tariffs could fuel inflation. According to Reuters, Bessent had told partners at his Key Square investment firm prior to Trump winning the 2024 election, that tariffs are inflationary.”
Bessent forcefully rejected that narrative at the Wednesday hearing, telling lawmakers there is no evidence the tariffs are causing sustained inflationary pressure on the broader U.S. economy. He argued that inflation trends have instead been shaped by other factors, and defended the administration’s tariff strategy as part of a broader economic vision.
“If I was mistaken, I want to correct it. And I was also mistaken when I said the tariffs could be inflationary,” Bessent told the House Financial Services Committee, “So tariff inflation was the dog that didn’t bark.”
Reuters also reported that Bessent claimed that “outside auditors” will be “brought in” to monitor the flow of oil funds to Venezuela after the Trump administration captured its president, Nicolas Maduro, last month.
In the heated exchange, Reuters stated that Bessent also asserted the Federal Reserve had lost public confidence in its inflation-fighting credibility, a claim that drew pushback from several members of the panel. He stated that the Fed’s independence could be threatened if it fails to regain that trust, underscoring a fractious relationship between fiscal and monetary policy debates in Washington.
According to CNN, Representative Maxine Waters (D-California) was among those sharply critical of the secretary’s stance. Waters accused the administration of not doing enough to protect Americans from rising costs and questioned Bessent vigorously on his views about trade policy’s impact on everyday prices. That verbal clash even prompted Waters to request the committee chair intervene after tensions rose.
Bessent’s reversal comes as Reuters reports that the Treasury is defending a suite of policies it argues will strengthen U.S. economic security and fiscal balance. In recent months, he has also emphasized that tariff revenues are expected to rise substantially and could be used to reduce government debt, a position he outlined long before this hearing.
Secretary Bessent could not be reached for comment at the time of publication.
