US Treasury Secretary Bessent stated publicly on Wednesday that despite some recent underwhelming economic indicators, the US economy is still poised to achieve growth exceeding 3% this year. In a media interview, he noted that US economic fundamentals remain robust, making growth figures in the 3% range entirely possible. This comment comes amid significant divergence in market views regarding the US economic outlook. Over the past two quarters, US economic growth has slowed due to multiple factors, including persistent high inflation, a cooling labor market, and tariff policies.

Data indicates that US first-quarter GDP grew at an annualized rate of 1.6%, while the fourth quarter of last year saw growth of only 0.5%, bringing full-year economic growth to 2.1%. Bessent believes the current slowdown is more of a temporary phase rather than a structural deterioration. He reiterated his previously proposed core agenda: achieving a 3% economic growth rate, reducing the federal fiscal deficit to 3% of GDP, and increasing domestic crude oil production by 3 million barrels per day. Bessent revealed that before geopolitical uncertainties subsided, the US economy was approaching a 4% growth rate in February of this year, and growth momentum is expected to recover as the situation stabilizes.

However, traders on prediction market platforms hold a more cautious stance. Latest positioning data shows the market assigns only a 14.2% probability to GDP growth falling within the 2.6% to 3.0% range. In contrast, traders are more inclined to believe economic growth will land in the 2.1% to 2.5% range. These contracts will ultimately settle based on officially published economic data and are viewed as important indicators reflecting true market expectations. Despite government officials continually emphasizing economic resilience, prediction markets currently do not believe the economy can easily achieve these growth targets.

Beyond economic growth, the fiscal deficit remains a key focus. Bessent stated there is an opportunity to reduce the deficit ratio to the 3% range before the end of the presidential term. When the fiscal deficit-to-GDP ratio drops to around 3%, the US debt-to-GDP ratio will begin to decline gradually, which is crucial for long-term fiscal sustainability. Data shows the US fiscal deficit-to-GDP ratio was 5.8% at the end of last year, having exceeded 6% for the previous two years. This level is quite rare in peacetime, mainly due to the lingering impact of large-scale fiscal stimulus policies implemented during the pandemic. As of the first eight months of this fiscal year, the US budget deficit accumulated to $1.25 trillion, down approximately 9% compared to the same period last year.

High interest expenses remain one of the biggest pressures on public finances. Currently, debt servicing costs have become the second-largest budget expenditure item after Social Security. Facing rising debt interest costs, the President has recently continued to call on the Federal Reserve to lower interest rates, believing that reducing borrowing costs will help alleviate the federal government debt burden while providing more support for businesses and consumers. However, inflation has heated up again this year, and the Fed remains cautious about further rate cuts. Market expectations indicate investors are re-evaluating future interest rate paths, with some traders even starting to bet that the Fed might raise rates again later this year. Regarding this, Bessent stated that the President has full confidence in the new Federal Reserve Chair and believes correct policy decisions will be made.