Scott Bessent’s ‘gotcha’ moment on Trump’s tariffs and inflation: He denies writing ‘tariffs are inflationary’ in letter to hedge fund investors

6 days ago 1

A House Financial Services Committee hearing descended into chaos and personal invective on Tuesday as Treasury Secretary Scott Bessent clashed with ranking member Maxine Waters (D-Calif.) over the economic impact of President Trump’s tariff policies. The heated exchange, ostensibly about inflation and housing costs, culminated in a tense standoff where Waters repeatedly silenced the secretary, telling him, “You don’t get to talk,” and questioning his dignity as he attempted to interrupt her line of questioning.

The confrontation began with Waters pressing Bessent on what she characterized as a convenient evolution in his economic philosophy regarding tariffs. Waters asked the secretary whether he had written a letter to hedge fund investors warning that “tariffs are inflationary.” Bessent offered a terse “no” in response.

Bessent’s denial came despite reporting dating back at least a year, as noted by the Wall Street Journal’s Nick Timiraos on X, that the Treasury secretary wrote that exact sentiment in February 2024. “Tariffs are inflationary and would strengthen the dollar,” Bessent wrote to his hedge fund’s investors. “Hardly a good starting point for a U.S. industrial renaissance … The tariff gun will always be loaded and on the table but rarely discharged.”