Treasury Secretary Scott Bessent has defended the recent correction in major stock indices, calling it a “healthy” development. The S&P 500 fell over 10% from its peak on February 19 to March 13, while the Nasdaq dropped more than 11%. Bessent attributes this decline to the market’s “euphoric” state, which he believes can lead to financial crises.
Bessent has been in the investment business for 35 years and views corrections as a necessary part of the market’s natural cycle. He suggests that policymakers should not have intervened earlier in 2006-07 to prevent the global financial crisis. Instead, he advocates for a “transition” period as government spending declines and deficits decrease.
The Treasury Secretary’s comments come after some Cabinet members warned President Trump about the potential risks of his economic strategy, including tariffs and Elon Musk’s budget cuts. These moves have alienated allies in Congress and abroad, creating uncertainty and chaos. Bessent’s defense of the market correction highlights the challenges policymakers face in navigating the economy during times of change.
Source: https://www.axios.com/2025/03/16/bessent-stock-market-correction-healthy