Treasury's Bessent says he was wrong when he said tariffs could be inflationary

WASHINGTON: U.S. Treasury Secretary Scott Bessent on Wednesday said he was wrong when he and his Key Square investment firm told partners in January 2024 - before U.S. President Donald Trump won the presidency - that "tariffs are inflationary."

Grilled about the document during a House Financial Services Committee hearing, Bessent said he wished to correct the record. "If I was mistaken, I want to correct it. And I was also mistaken when I said the tariffs could be inflationary."

Bessent said the U.S. economy was growing and inflation was coming down, despite a slew of tariffs imposed by Trump since taking office a year ago. "So tariff inflation was the dog that didn't bark," he told lawmakers.

U.S. data last month showed a larger-than-expected rise in the Producer Price Index in December, suggesting inflation could pick up in the months ahead.