Scott Bessent, Trump's Treasury Secretary pick, is waving away Moody's concerns about U.S. fiscal health with the casual confidence of someone who's never had a credit card declined at a restaurant.
In what might be the most telling preview yet of the incoming administration's economic approach, Bessent labeled the rating agency a "lagging indicator" of America's financial condition—a remarkable bit of preemptive damage control that deserves unpacking.
Look, there's something almost poetically circular about dismissing the relevance of ratings agencies right before you take charge of the nation's checkbook. I've covered economic transitions since 2008, and this kind of "the messengers are wrong" positioning typically comes after bad news, not prophylactically before it.
What's Bessent really saying here? Between the lines, he's establishing the narrative framework for the next four years: indicators that support the administration's policies will be "forward-looking," while troublesome data points can be dismissed as "lagging." It's Narrative Management 101.
The Walmart tariff discussion is particularly fascinating. Bessent casually mentioned his "very good relationship" with CEO Doug McMillon, suggesting that personal connections—not economic fundamentals—will somehow cushion the impact of new tariffs. As if McMillon might absorb billions in tariff costs as a personal favor! (I checked with three retail analysts who found this notion somewhere between amusing and absurd.)
"Doug and I have a very good relationship," isn't economic policy. It's LinkedIn networking talk.
Meanwhile, the characterization of the Federal Reserve as being in "wait-and-see mode" on tariffs subtly repositions the central bank from independent inflation fighter to passive observer. This framing deserves more attention than it's getting.
The China tariff discussion revealed another layer of the emerging approach. Bessent described what he called a "mechanism in place to continue talks" with China—a phrase so bureaucratically vague it could mean absolutely anything or nothing at all. For other countries, however, tariffs might be "imposed unilaterally." The contrast speaks volumes.
I spoke with several former Treasury officials who noted this two-track approach signals a fundamental shift in trade diplomacy, though none would speak on record. One called it "relationship-based economics rather than rules-based."
What's most interesting about Bessent's Moody's dismissal is what he doesn't offer as alternative metrics for fiscal health. If debt-to-GDP ratios, deficit trajectories, and interest payment percentages are merely "lagging indicators," what exactly are the leading ones? Apparently... confidence? CEO relationships? The power of positive thinking?
The financial markets, stubborn things that they are, tend to render their own verdicts regardless of narrative framing. Ten-year Treasury yields don't particularly care about our characterization of various indicators—they respond to investor perception of risk.
Truth is, we're watching the construction of an economic narrative framework in real time. It's neither unusual nor surprising for an incoming administration to set these foundations, but the particular architecture Bessent is designing appears built to withstand significant economic turbulence ahead.
In the meantime, I'll be watching Walmart's quarterly reports with unusual interest. If they really do "eat" those tariffs as seemingly promised in Bessent's telling, it'll be among the most expensive acts of patriotic corporate sacrifice in American retail history.
And somehow, I doubt shareholders are feeling quite that generous.
