US Treasury Secretary: High interest rates could push the housing sector into recession

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US Treasury Secretary Scott Bessent said on November 2 that some sectors of the US economy , especially the housing sector, may have fallen into recession due to high interest rates, thereby once again calling on the Federal Reserve (Fed) to accelerate interest rate cuts.

On CNN's "State of the Union," Bessent said the U.S. economy is in good shape, but there are areas of the economy that are in recession. He added that the Fed has caused a lot of problems with the distribution of wealth with its policies.

Explaining this, Mr. Bessent said that although the overall US economy is still strong, high mortgage rates are still hampering the real estate market. According to him, the housing industry is actually in a recession, in which low-income consumers are the most affected because they are the ones with debt, not assets.

The number of signed but unclosed home purchase contracts in the U.S. remained virtually unchanged in September, according to the National Association of Realtors.

Last week, Fed Chairman Jerome Powell signaled that the central bank might not cut interest rates further at its December meeting, drawing sharp criticism from Mr. Bessent and other officials in President Donald Trump’s administration.

In a recent interview with the New York Times, Federal Reserve Governor Stephen Miran expressed the view that if he continued to pursue a tight monetary policy for a long time, this monetary policy could push the economy into recession. According to him, there is no reason to take such a risk, when rising inflationary pressures are not a major concern.

Mr. Bessent agreed. He said the Trump administration’s cuts in government spending have helped reduce the deficit as a percentage of gross domestic product (GDP) from 6.4% to 5.9%, which will help reduce inflation. He added that the Fed could also help by continuing to lower interest rates.

Source: https://vtv.vn/bo-truong-tai-chinh-my-lai-suat-cao-co-the-day-linh-vuc-nha-dat-vao-suy-thoai-100251103132906257.htm