Scott Bessent says real affordability relief, 'substantial drop' in inflation coming soon

Economic Outlook - U.S. Treasury Secretary Scott Bessent forecasts a "bountiful" economy in 2026, with expectations of real affordability relief for families and meaningful progress on prices, wages, and housing [1][2] - Bessent emphasizes that 2025 is a preparatory year, while 2026 is expected to yield significant economic benefits, contingent on the government remaining operational [2] Tax Refunds and Income Growth - Substantial tax refunds for working American households are anticipated in the first quarter, which will lead to increased real incomes and improved job growth [3][6] - Estimated tax refunds of $1,000 to $2,000 are expected to contribute to a productivity boom in 2026, provided political challenges do not hinder progress [6] Inflation and Affordability - Bessent predicts a significant drop in inflation within the first six months of the next year, attributing this to falling rents and lower energy prices [6] - The administration's policies, particularly regarding immigration, are argued to have previously inflated rents, but recent enforcement measures are leading to a decrease in rental costs [6] Economic Growth and Market Performance - The economy is diversifying beyond Big Tech, with positive performance observed in other sectors of the stock market [7] - Bessent asserts that growth does not inherently create inflation; rather, inflation arises from demand exceeding supply, and deregulation policies are enhancing supply across various sectors [8] Future Economic Conditions - The expectation is set for a return to a non-inflationary growth environment where both lower-income households and working Americans benefit, suggesting a favorable year ahead for both Main Street and Wall Street [9]