- After the worst selloff on Wall Street since the early days of the COVID-19 pandemic, Treasury Secretary Scott Bessent said he was impressed with the market’s ability to handle surging volumes and noted that Wall Street has a history of underestimating President Donald Trump, whose tariff policies are raising fears the economy will be suddenly thrown into a recession.
Treasury Secretary Scott Bessent said the market’s ability to handle surging volumes is reassuring and downplayed the massive stock selloff as a short-term reaction.
In an interview with NBC’s Meet the Press that aired Sunday, he also gave no indication that President Donald Trump will back off from this aggressive tariffs and said there doesn’t have to be a recession.
That’s despite Wall Street pricing greater odds of a downturn, with JPMorgan warning tariffs will cause GDP to shrink this year.
“One thing that I can tell you, as the Treasury secretary, what I’ve been very impressed with is the market infrastructure, that we had record volume on Friday. And everything is working very smoothly so the American people, they can take great comfort in that,” Bessent told NBC.
On Friday, the Dow Jones Industrial Average collapsed 5.5%, losing 2,231 points, the S&P 500 sank 6%, and the Nasdaq crashed 5.8%, sending the tech-heavy index more than 20% below its recent high and putting it in bear market territory.
That followed similar market carnage on Thursday. The two sessions wiped out $6 trillion in market cap and marked the worst selloff since the early days of the COVID-19 pandemic in 2020.
Bessent said “we get these short-term market reactions from time to time,” and added that Wall Street has consistently underestimated Trump, pointing to an initial stock decline after he unexpectedly won the 2016 election.
“And it turned out he was going to be the most pro-business president in over a century, maybe in the history of the country. And we went on to very high after-inflation returns for the next four years,” Bessent said.
When asked what he would say to Americans who plan to retire and just saw their portfolios take a big hit, he dismissed that as a “false narrative.”
“I think they don’t look at the day-to-day fluctuations of what’s happening,” Bessent said. “And you know, in fact, most Americans don’t have everything in the market.”
For those with 401(k) accounts, most have 60% of their holdings stocks and 40% in bonds, he explained, adding that such 60/40 accounts are down 5% or 6% on the year.
“If you look day-to-day, week-to-week, it’s very risky. Over the long term, it’s a good investment,” Bessent said.
For those with decades ahead of them until retirement, experts say the best course of action is to take a breath and leave their 401(k) alone.
This story was originally featured on Fortune.com
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