Treasury Secretary Scott Bessent wants you to know that the recent inflation jump isn't a broad-based problem. It's an energy shock, and it'll go away once the Iran conflict is over. That's the message he delivered on NBC's Meet the Press on Sunday.
Asked whether Trump's policies are driving inflation up, Bessent pointed to the data 'underneath the hood.' He said core inflation had been 'very flat' before September and had fallen four months in a row. 'So core inflation is down,' he claimed. He also noted that food prices are below the Federal Reserve's targets, rents are down, and prescription drug prices saw the largest decrease in history.
'We have an energy shock,' he said, adding that prices will come down once the U.S. gets 'to the other side of the Iran conflict.'
Core Inflation Rises
The numbers tell a slightly more nuanced story. Consumer prices rose 3.7% year over year in September. Core inflation rose 0.3% in September, lifting the annual core rate to 2.6% from 2.4%. It has gained speed since June, when it was flat, rising 0.2% in July and 0.3% in August.
Gasoline jumped 9.1% in September and accounted for more than half of the monthly increase, while food prices were unchanged, rent rose 0.2%, and prescription drugs fell 1.2%.
The Fed raised rates by 25 basis points in September, and another hike is expected this year. Traders see an 83.9% chance of no change at the October meeting and a 16.1% chance of a hike, according to CME FedWatch. 91.8% expect a hike in December.
Gas Prices Hinge on Iran
Regular gasoline averaged $4.2988 per gallon nationally on Sunday, according to American Automobile Association, down from $4.4687 a month ago but up roughly 41% from a year ago. Diesel averaged $6.3224, down from $6.4476 a month ago.
Asked what he tells voters who say they are struggling, Bessent pointed to the former President Joe Biden era, 'where the American people got smoked,' with 21.5% inflation and only about 17% wage increases.
Pressed on when the administration would take responsibility for the economy, he replied, 'we won't own the economy.'
On Thursday, Trump said that Iran will be 'defeated very quickly' and predicted oil and diesel prices 'will be falling like a rock' afterward.
At the time of writing, Brent crude prices were down 1.79% to $107.89 per barrel, and WTI futures were down 0.80% to $100 a barrel.
