{"id":18810,"date":"2026-02-04T21:06:05","date_gmt":"2026-02-04T21:06:05","guid":{"rendered":"https:\/\/microvibenews.com\/?p=18810"},"modified":"2026-02-04T21:06:05","modified_gmt":"2026-02-04T21:06:05","slug":"scott-bessents-gotcha-moment-on-trumps-tariffs-and-inflation","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=18810","title":{"rendered":"Scott Bessent’s ‘gotcha’ moment on Trump’s tariffs and inflation"},"content":{"rendered":"

<\/p>\n

A House Financial Services Committee hearing descended into chaos and personal invective on Tuesday as Treasury Secretary Scott Bessent clashed with Ranking Member Maxine Waters (D-CA) over the economic impact of President Trump\u2019s tariff policies. The heated exchange, ostensibly about inflation and housing costs, culminated in a tense standoff where Waters repeatedly silenced the Secretary, telling him, \u201cYou don\u2019t get to talk,\u201d and questioning his dignity as he attempted to interrupt her line of questioning.<\/p>\n

\n

The confrontation began with Waters pressing Bessent on what she characterized as a convenient evolution in his economic philosophy regarding tariffs. Waters asked the Secretary whether he had written a letter to hedge fund investors warning that \u201ctariffs are inflationary.\u201d Bessent offered a terse \u201cno\u201d in response.<\/p>\n

Bessent\u2019s denial came despite reporting dating back at least a year, as noted by The Wall Street Journal<\/em>\u2018s Nick Timiraos on X, that the Treasury Secretary wrote that exact sentiment in February 2024. \u201cTariffs are inflationary and would strengthen the dollar,\u201d Bessent wrote to his hedge fund\u2019s investors. \u201cHardly a good starting point for a US industrial renaissance \u2026 the tariff gun will always be loaded and on the table but rarely discharged.\u201d<\/p>\n

Are tariffs an inflationary tax or not?<\/h2>\n

Undeterred, Waters pointed to a New York Times<\/em> article citing Bessent\u2019s testimony before a Senate committee the previous summer, in which he allegedly claimed, \u201cthere is no inflation, tariffs are not being passed on to consumers,\u201d and dismissed critics as suffering from \u201ctariff derangement syndrome.\u201d Waters sought to clarify the Secretary\u2019s current stance, asking plainly whether tariffs drive up costs. Bessent pushed back, citing the San Francisco Federal Reserve and \u201c150 years of data\u201d to argue that \u201ctariffs do not cause inflation.\u201d In this regard, he was relying on historical research showing that tariffs are a relatively small share of GDP and that many large inflation episodes were driven by wars, oil shocks, or monetary policy rather than trade barriers, so the macroeconomic impact often looks small even when particular goods become more expensive.<\/p>\n

The line of questioning took a sharper turn when Waters highlighted a contradiction in the administration\u2019s recent messaging. She noted that Bessent had told Fox News in November that the government intended to reduce tariffs on goods like coffee and bananas to \u201cbring the prices down very quickly.\u201d<\/p>\n

\u201cMr. Secretary, why was that announcement even necessary if tariffs aren\u2019t inflationary?\u201d Waters asked, challenging the \u201cTrump logic\u201d that tariffs are paid solely by foreign nations. \u201cA tariff on coffee or bananas shouldn\u2019t raise the price of either for American consumers\u2026 but that isn\u2019t reality. It did raise prices across the board.\u201d Waters argued that levying tariffs on goods the U.S. does not produce only serves to \u201cpunish the American consumer.\u201d<\/p>\n

The tension in the room spiked when the discussion shifted to the housing crisis. Waters accused the Trump administration of exacerbating affordability issues by levying tariffs on critical construction materials like lumber, steel, and appliances. She asserted that these policies would result in \u201chalf a million fewer homes built at a time when we need more homes built, not less.\u201d<\/p>\n

As Waters spoke, Bessent attempted to interject, noting that lumber was trading at a five-year low. Lumber futures are not, in fact, at a five-year low, priced at $589.50, versus a price of $469 in January 2023.<\/p>\n

\n
\"\"<\/div>\n<\/figure>\n

Bessent\u2019s interruption triggered an immediate and sharp rebuke from the Ranking Member. \u201cReclaiming my time. You don\u2019t get to talk,\u201d Waters declared, refusing to yield the floor. As Bessent continued to speak over her, attempting to pivot the blame for the housing shortage to \u201cmassed immigration\u201d and the \u201c10 million immigrants\u201d admitted into the country, Waters\u2019 patience visibly disintegrated.<\/p>\n

\u201cCan you maintain some level of dignity?\u201d Waters snapped as the two spoke over one another.<\/p>\n

The committee chair eventually intervened, stating that the \u201cgentlewoman\u2019s time has expired,\u201d though Waters protested that the Secretary had consumed her time with his interruptions.<\/p>\n

Generally, Waters\u2019 questioning was aligned with research showing high pass?through from tariffs to import and retail prices, a non-trivial contribution of Trump tariffs to overall inflation, and significant cost effects in sectors like residential construction, where input tariffs hit concentrated supply chains. Bessent\u2019s response is aligned with arguments that tariffs\u2019 share of total consumption is limited, so they cannot explain most of the recent inflation surge, which is heavily service?driven.<\/p>\n

In the current research landscape, the weight of evidence supports the conclusion that Trump\u2019s tariffs have been modestly but clearly inflationary at both the goods and aggregate levels, even if they are not the primary driver of overall inflation. The hearing dramatizes that tension: Bessent is effectively arguing that \u201cmodest\u201d equals \u201cirrelevant,\u201d whereas Waters is stressing that for families squeezed by housing and groceries, the tariff?driven portion of inflation is politically and materially significant.<\/p>\n

For this story,\u00a0<\/em>Fortune\u00a0journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.<\/em><\/p>\n<\/div>\n

#Scott #Bessents #gotcha #moment #Trumps #tariffs #inflation<\/p>\n","protected":false},"excerpt":{"rendered":"

A House Financial Services Com… <\/p>\n","protected":false},"author":1,"featured_media":18811,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[8151,11766,176,3097,6110,488,490,491,496],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/18810"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18810"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/18810\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/18811"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}