'Certain sectors in recession': US treasury secretary Scott Bessent's big admission; blames federal reserve

US Treasury Secretary Scott Bessent has admitted that parts of the American economy are already in recession, blaming the Federal Reserve’s monetary policies for the slowdown while urging it to accelerate rate cuts. Speaking to CNN’s State of the Union on Sunday, Bessent said the economy was in a “transition period” following post-pandemic inflation and government spending cuts under the Trump administration.“I think that we are in good shape, but I think that there are sectors of the economy that are in recession,” he told CNN’s Jake Tapper. “The Fed has caused a lot of distributional problems with their policies.” He cited the housing market as the clearest example, saying, “If the Fed brings down mortgage rates, they can end this housing recession.” Bessent pointed out that high interest rates had pushed the housing market into a prolonged slump, particularly hurting lower-income Americans. “If we are contracting spending, then I would think inflation would be dropping. If inflation is dropping, then the Fed should be cutting rates,” he said, adding that the administration’s reduced government expenditure had already helped bring the deficit-to-GDP ratio down from 6.4% to 5.9%.Federal Reserve Chair Jerome Powell recently hinted that no further cuts were expected at the December meeting, drawing criticism from Bessent and other Trump officials. Fed Governor Stephen Miran, who also serves as chairman of the White House Council of Economic Advisers, warned in a *New York Times* interview that “if you keep policy this tight for a long period of time, then you run the risk that monetary policy itself is inducing a recession.”Data from Redfin shows the number of US homes changing hands has fallen to its lowest level in nearly 30 years, with only 28 out of every 1,000 homes sold between January and September. Redfin’s chief economist Daryl Fairweather called the situation “not healthy for the economy,” noting that “if people are stuck, it’s reflective of how the economy is stuck.”Meanwhile, the labour market has shown signs of weakness, with US employers adding just 22,000 jobs in August and the private sector losing 32,000 in September, according to ADP data. As companies like Microsoft, Amazon and General Motors announce job cuts, consumer confidence continues to fall — further dampening home sales and deepening concerns about the economy’s trajectory.At the centre of it all, Bessent’s message to the Federal Reserve was clear: ease rates soon or risk deepening the recession already gripping key sectors.