Treasury Secretary Bessent says U.S. GDP growth can return to 3% before end of the year

Treasury Secretary Scott Bessent expressed confidence Wednesday that the U.S. economy can get back on the path to 3% growth as the Iran war nears conclusion.

“We can have something with a three in front of it this year,” Bessent said in a live interview on CNBC’s “Squawk Box.” “The underlying economy has been strong.”

Growth, however, has been slow over the past two quarters as the domestic economy has battled a number of factors including a resurgence in inflation, what had been a moderating labor market and the impact of President Donald Trump’s tariffs.

Gross domestic product rose at a 1.6% annualized rate in the first quarter after rising just 0.5% in the fourth quarter of 2025, concluding a year of 2.1% growth.

However, Bessent reiterated that his “3-3-3” plan is still in reach — 3% growth, a 3% deficit-to-GDP rate, and a three million barrels per day increase in domestic oil production. He estimated that the economy was running at about a 4% growth rate in February, just prior to the U.S. and Israel launching their attack on Iran.

On the deficit goal, he said, “I think by the end of the president’s term we can be at something that looks like it could have a three in front of it. What’s important about that, that’s when you start paying down overall debt as a percent of the economy.”

The deficit-to-GDP ratio was at 5.8% to end 2025 after holding above 6% in 2023 and 2024 — uncommonly high rates for peacetime as heavy fiscal spending during the Covid pandemic spilled over into subsequent years.

The budget shortfall stands at $1.25 trillion through the first eight months of fiscal 2026, 9% lower than the prior year. A main contributor has been high financing costs, which account for the biggest budget outlay after Social Security.

Trump has repeatedly pushed for the Federal Reserve to lower benchmark interest rates as a way to ease the debt burden. However, the Fed has resisted additional rate cuts during the inflation surge this year.,

Bessent said Trump has “every confidence” that new Fed Chairman Kevin Warsh will guide policy appropriately.