Bessent says shut down impact getting worse for economy, Hasset says recession possible

The US economy is shrinking according to comments from these two senior Trump officials.

US Treasury Secretary Bessent:

• the impact of the government shut down on the economy is getting worse and worse
• expects prices to come down over the months ahead

(note, in a recession prices will tend to fall, or at least not rise so quickly, yes)

Trump key economic advisrer and candidate for Fed Chair Hasset:

• economic growth could be negative in the fourth quarter if the shut down drags on

(note, if negative economic growth persists for two quarters in a row that is the commonly accepted definition of an economic recession)

Bessent and Hassett are doing a couple of things here

• softening the public up for bad news on the economy in the months ahead
• seeking to blame others, not the administration they are key members of, for a possible recession in the US

For markets recessions are not good news, but the lower rates that usually result are tailwinds for risk assets.