Finance Minister Scott Bessent stated on Wednesday that US GDP growth could return to 3% by the end of the year, as the war in Iran nears its conclusion. He expressed confidence that the US economy could resume this trajectory.
“We could have something with a three in front of it this year,” Bessent said in an interview on CNBC’s “Squawk Box,” adding that “the underlying economy was strong.” However, growth has been slow over the past two quarters as the domestic economy has grappled with several factors, including a resurgence of inflation, a moderate labor market, and the impact of President Donald Trump’s tariffs.
Gross domestic product (GDP) grew at an annual rate of 1.6% in the first quarter after increasing by only 0.5% in the fourth quarter of 2025, ending the year with growth of 2.1%.
Plans for growth and deficit
Bessent confirmed that his “3-3-3” plan remains achievable: 3% growth, a deficit-to-GDP ratio of 3%, and an increase in domestic oil production by 3 million barrels per day. He estimated that in February, the economy was growing at approximately 4%, just before the US and Israel launched an attack on Iran.
Regarding the deficit target, he noted: “I think by the end of the president’s term, we could achieve something that could have a three in front of it. The important thing is that you then start to reduce the overall debt as a percentage of the economy.” The deficit-to-GDP ratio was 5.8% at the end of 2025, after remaining above 6% in 2023 and 2024. These figures are exceptionally high for peacetime, as significant fiscal expenditures during the Covid pandemic carried over into subsequent years.
The budget deficit stands at 1.25 trillion dollars for the first eight months of the 2026 fiscal year, 9% less than the previous year. The primary factor for this was high financing costs, which are the largest budget expenditure item after social security.
Donald Trump has repeatedly called on the Federal Reserve to lower base interest rates to ease the debt burden. However, the Fed has resisted further rate cuts this year due to a surge in inflation. Bessent stated that Trump is “completely confident” that the new Fed Chairman Kevin Warsh will properly manage the policy.
Source: CNBC