Bessent Says U.S. Deficit-to-GDP Fell to 5.7%-5.8% in Fiscal 2026
Macro
U.S. Treasury Secretary Scott Bessent said Tuesday that the U.S. deficit-to-GDP level declined to 5.7%-5.8% for fiscal year 2026, down from the "astounding level" of roughly 6.3% the Trump administration inherited from the prior administration. Testifying before the House of Representatives Financial Services Committee, Bessent said, "We would have continued that fiscal contraction this year but for the tariff refunds," and added, "We will talk about a fiscal consolidation — that is coming." In his prepared opening statement, he said the private sector created more than 1M jobs under President Donald Trump's second term and that real wages are outpacing inflation, though recent Bureau of Labor Statistics data show CPI rose 3.4% Y/Y in August while average hourly earnings increased 3.1% Y/Y that month. Bessent also said that at the G20 Finance Ministerial meetings earlier this month, economies representing more than two-thirds of global GDP agreed to address excessive and persistent imbalances, advance financial literacy, improve the global sovereign debt architecture, and support regulatory modernization, priorities he said reflect the administration's approach to international institutions. He added that the same discipline is being brought to the IMF and World Bank so they remain true to their core mandates.
