WHEN: Today, Wednesday, October 15, 2025
WHERE: CNBC's "Invest in America Forum"
Following is the unofficial transcript of a CNBC interview with U.S. Treasury Secretary Scott Bessent at CNBC's "Invest in America Forum" which took place today, Wednesday, October 15 in Washington, D.C.
Mandatory credit: CNBC's "Invest in America Forum"
SARA EISEN: Thank you.
U.S. TREASURY SECRETARY SCOTT BESSENT: Good morning.
EISEN: And I'm so happy that he's here also because he's in very high demand this week for IMF World Bank meetings. So, thank you.
BESSENT: America first.
EISEN: America first. There we go. So, the investment boom. I mean, it feels like every day we either get an Oval Office announcement from a CEO, some of whom are here today, or some massive AI deal. Is this boom that we're seeing sustainable?
BESSENT: Sure. I think we're just seeing the beginning of it. And if we go back, Sara, I think because there was so much pent up demand, I think the entire Biden four years saw $1 trillion of foreign direct investment. Maybe it was $250 billion last year. So, you know, couple of things, there's pent up demand but then President Trump has unleashed this, this boom with his policies. So, whether it is trade, tax, so the tariff policy, the great certainty that we have from the One Big, Beautiful Bill. And he's made it known that America's open for business. Do your business here, we will give you energy, tax certainty. We're the biggest market in the world. We're going to give you regulatory certainty. One thing, everyone asked me, what was one of your biggest surprises coming into government? And we lost the ability to make things in the United States and a lot of it was through regulation, permitting to get a factory built, you know, God forbid if you tried to cross state lines on a pipeline, you know, in terms of drilling. So, President Trump has really been all in and unleashed that. Now, on the other side, the only thing slowing us down here is this government shutdown. The government is standing in the way. We've tried to get it out of the way. And, you know, I think that this is, the Democrats have not been able to shut President Trump down in the courts. They go straight to the courts to fight the policies. They lose in the Supreme Court. They tried to shut him down, not with you all, but the media, you know, creates these narratives. And then, now, they're just going to shut down the government, fold their arms and not get anything done. And you know, as we can see here, it's the private sector that's going to get it done. We need to get the government out of the way. We need to get it reopened. And you know, I'm calling on moderate Democrats to come across the aisle, reopen the government, and you'll be a hero. You'll be a hero.
EISEN: I mean, is that how this ends? It's, we're on day 15, and it doesn't look like there's any sign of a deal.
BESSENT: Well, you there there's a thought out there that they're at least waiting to, you know, this crazy No Kings rally this weekend, which is going to be the farthest left, the hardest core, the most unhinged in the Democratic Party, which is, you know, a big title. And, you know, No Kings equal no paychecks. We are paying our military today. The Pentagon went into surplus funds, and we'll be able to make the paychecks. And you know, I think the other problem now is uh you know the mainstream media if this were Republicans who shut down the government, there would have been screaming. There would have been examples of things going wrong, but because it's the Democrats, they're complicit. And like I said, if moderate Republican senators come across the aisle, they will be heroes. They need to break away from the hive, from this radicalism, Chuck Schumer and Hakeem Jeffries. They call them two guys from Brooklyn who are completely detached from America. You know, we are hostage to Senator Schumer's poll numbers. He did the right thing. President Trump congratulated him in the spring when he passed a clean C.R. And what's changed between now and then? His poll numbers. He has collapsed in the polls. And now it looks like Representative Jeffries is going to be primary from the left. And I didn't think there was any room over there.
EISEN: Some people blame, I mean people blame the current government for the shutdown. I mean, I know you're blaming the Democrats, but often the blame goes to who's in power.
BESSENT: How is that? The, Mike Johnson passed a clean C.R. Three Democratic senators have come over. Leader Thune has a vote every day and they want to negotiate. We're saying, reopen the, reopen the government, negotiate.
EISEN: Is it hurting the economy?
BESSENT: I've seen numbers that are starting to hurt the economy maybe up to $15 billion a day.
EISEN: Do you expect it to have a material impact on the labor market?
BESSENT: Could. I think it's having an impact on confidence. We saw a drop in small business confidence which had been very strong. So, you know, hopefully we can get this the Democrats will reopen and you know, we can get back off to the races.
EISEN: Interestingly, the market lately has been more concerned about trade, I think, than the government shutdown, especially this latest flare up between the U.S. and China. So, what happened from your point of view? Because I thought talks were going well, lines of communication were open, and then we learn about this rare earth mineral restriction from China, and now it's back and forth, and things are heating up again.
BESSENT: They are and the Chinese are trying to backfill the narrative, you know, saying, well, the U.S. did A, B, and C, therefore we had to do D. And that that's not true. Is, there was a lower level trade person who was slightly unhinged here in August. I think his name is Lee – and, you know, threatening, saying that the China would unleash chaos on the global system if the U.S. went ahead with our docking fees for Chinese ships. And this is clearly something that they were planning all along. I think that things can deescalate, that we don't want to have to escalate. We have things that are more powerful than the rare earth export controls that the Chinese want to put on. And, Sara, to be clear, this is China versus the world. It's not a US-China problem. Good news is that this is IMF Week. A lot of my counterpart or all my counterparts are here. We're going to be speaking with our European allies, with Australia, with Canada, with India and the Asian democracies. And we're going to have a fulsome group response to this because bureaucrats in China cannot manage the supply chain or the manufacturing process for the rest of the world.
EISEN: What is a fulsome response? What does that mean?
BESSENT: We have lots of levers that we can pull for products that they need that could be equally damaging. We don't want to damage their economy. We don't believe that they want to damage ours. But they are a command-and-control economy, and they are going to neither command nor control us, and we're going to assert sovereignty, so are the Western allies. And part of this investment boom that we're seeing is President Trump wanted to reshore and part of the reshoring is strategic. So, we don't want to decouple with China. I don't believe they want to decouple, but this rare earth export control is a sign of decoupling.
EISEN: But we need them, don't we?
BESSENT: Sorry?
EISEN: We need those rare earth minerals, don't we?
BESSENT: We do.
EISEN: I mean, that's leverage that they have on us.
BESSENT: We have lots of leverage on them, too. We, unfortunately—
EISEN: We have semiconductors, right?
BESSENT: Aircraft engines, many, many, many minerals that are also important for their supply system. But you know, what we learned during COVID, COVID was a test run for what we're seeing now in terms of bringing back strategic industries. So, we have this big investment boom, and I would say 10 percent, 15 percent, 20 percent of it is bringing back five to seven strategic industries that we need. You know, whether it's pharma, whether it's semiconductors, whether it's shipbuilding, whether it's steel and rare earths. So, you know, this rare earth problem was decades in the making. Every past administration should be ashamed. President Trump tried to solve it in his last term, and the environmentalists threw a fit. So here we are. But again, I'm optimistic. We are now communicating at very high levels.
EISEN: Like right now?
BESSENT: Right now.
EISEN: With your counterpart? I think there was an effort to get you, there was a report today, there was an effort to get you with your, with your counterpart in China, the vice premier.
BESSENT: There have been many outreaches and a good thing too is China has, as they always do, a large delegation everywhere. They have a large delegation here at IMF-World Bank Week. So—
EISEN: You're meeting with them?
BESSENT: They're working level meetings.
EISEN: Okay. Is the, is the Trump-Xi meetings still on?
BESSENT: As far as I know, President Trump is a go on that. But, you know, again, I, we'll see. I think they have an excellent relationship and the reason this didn't really escalate is the level of trust between the two leaders. So, you know, that's an enduring part of U.S.-China and everything else stems from that.
EISEN: Is it also because the market clearly does not want to see things get worse? I mean, we saw a big slide on Friday.
BESSENT: Yeah. I think this narrative, terrible "Wall Street Journal" today article, you know, complete, you know, that, they're taking CCP dictation that, you know, President Trump, he likes a high stock market and but he, like me, believes that the high stock market is a result of good policies and it's the policies that we're talking about here today in terms of this CapEx boom. And you know, so the stock market is a result and you know, if we have to take strong measures against the Chinese, it won't be because the stock or we won't negotiate because the stock market's going down. We will negotiate because we are doing what is best economically for the US.
EISEN: The other thing that's keeping the stock market so high is the investment boom we're seeing in AI. And there's this question now about whether we're getting into bubble-like territories just because of the amount of spending and how quickly it's happening on a technology that's unproven and hasn't been profitable yet.
BESSENT: Sure. So—
EISEN: Are we in a bubble?
BESSENT: Couple of things. As you may know, I'm not an economist. I'm an economic historian. I have taught the history of booms and bust and—
EISEN: And traded them.
BESSENT: And trade -- and traded them. Thank you. And I think we are, could we be in the third inning? So—
EISEN: Really?
BESSENT: I think this is just taking off.
EISEN: Third inning of investment in AI?
BESSENT: Oh, sure, sure. An investment in usage. You know, I think there's a very good chance we see like in the '90s with the Internet that with office equipment finally having the productivity miracle. So, you know, we had substantial productivity increases in the '90s. I think we're starting to see that now. When I -- when I talk to Silicon Valley investors and to corporate America, they think that the AI implementation is just really going to start biting in terms of productivity first, second quarter of next year. And I think the other thing too is Biden administration wanted to shackle up AI through this diffusion policy. They wanted to regulate it. Just a few of the biggest companies would have had access to it. So, there is tremendous latent demand and then on the other side, there's bank executives here today, I was talking to them, through the financial deregulation that President Trump instructed me to carry out via our regulatory policies. "The Financial Times" had an article over the weekend that there may have been $2.5 trillion of lending space created and much of this can go into this CapEx boom. And you had a very good piece in "The Washington Post" this morning.
EISEN: Thank you.
BESSENT: And what always follows a CapEx boom is an employment boom.
EISEN: I was going to say, but this time there's worries that that employment boom might not happen if AI is making us so productive that we don't need as many people doing the jobs. That's one of the concerns.
BESSENT: It may affect specific jobs. But, you know, I can tell you, when you see this level of capex and you know, the pharma executives here, you know, as your article pointed out, the trillions -- tens of trillions of dollars of CapEx, there are going to be plenty of jobs. You know, all I hear is we're having trouble filling jobs. So, could there be some shuffling in the labor force? Sure. But I—
EISEN: You're not worried about like mass unemployment because of AI?
BESSENT: No, not at all. Not at all. And I did a podcast for the fellow who took over from Charlie Kirk yesterday and I was talking to him afterwards and he said, well, you know, because they have a lot of young people who follow him and he said, "What should I tell our viewers and listeners?" I said, "Get educated on AI because the, having the AI skills and the ability to use them is what's going to get you hired." Look, I'll date myself. My first job in 1984, I got put in charge of a project right out of the box because I knew how to use Lotus Notes and Ashton-Tate 1-2-3.
EISEN: No idea what that is.
BESSENT: Yeah, exactly. Yeah. Do you know what a 45 record is?
EISEN: Yeah. I think my dad had that. No. But it's interesting—
BESSENT: Probably worth a lot.
EISEN: Yeah. Do you, it's interesting you mentioned jobs because we've actually entered this period now where there's been a slowdown in job growth. So, what do you think is driving that? Some people are wondering, is this a supply issue because immigration has slowed down or is it a demand issue where businesses aren't hiring as much?
BESSENT: Well, I think it's a couple of things. I think with the securing of the border and then maybe there between deportations and voluntary deportations, have we seen two million people leave the workforce. And I think in terms of Americans having jobs, we're doing quite well. And then I think we are starting to see the right sizing of the federal government. So, I had always said that there would be a transition period. Federal government got very bloated and as government employment comes down, we're going to see this CapEx boom, and on the other side private employment will pick it up. So, and—
EISEN: That's happening?
BESSENT: I think that we are right on the cusp of that and government needs to get out of the way and reopen and create the conditions for this boom.
EISEN: And what do you see then for your economic forecasts? I mean, Atlanta Fed is predicting some pretty nice growth ahead. Do you feel like we are on an upswing?
BESSENT: I think we're definitely on an upswing because the One Big, Beautiful Bill was passed on July 4th. And you know, could I just say to this group, could you imagine if we were still negotiating a budget deal in the midst of this chaos the Democrats have created? The other thing that has gone unnoticed with all the headlines is we actually had a smaller budget deficit last year. Not by much, but it went down. And the way the math works, the deficit to GDP, which is the important number, now has a five in front of it. So—
EISEN: You want to see a three though?
BESSENT: Yes.
EISEN: Still possible?
BESSENT: Still possible.
EISEN: How do, how do you get there? I mean, tariffs are helping but not that much.
BESSENT: Crawl, walk, run, and you know, it's like Warren Buffett says, how do you lose weight? Exercise more, eat less. So, we're going to grow more, spend less or constrain spending, and the deficit to GDP takes care of itself.
EISEN: So that's going to -- that's going to come down.
BESSENT: Yes.
EISEN: What about the inflation outlook right now while we're talking about the economy? Because I know you have said tariffs are not inflationary, but we are seeing inflation firm up here and at least the progress on disinflation has stopped.
BESSENT: But it, Sara, if you look, the inflationary component is it's very disjointed because if you go through the numbers, a lot of the inflation is in services which has nothing to do with the tariffs. And if you get a one-time price adjustment that's not inflationary and you know, that comes out of spending somewhere else, exporters lowering prices, corporate America, because they have a lot of room elsewhere. Because what, one of the underappreciated things that's happening with the trade negotiations, you know, all we, all we hear here is oh, tariffs, tariffs, tariffs, on the U.S. and we've kind of established a minimum 15 percent baseline tariff, some countries are higher. But the underappreciated thing -- I know you had Jamieson Greer, USTR—
EISEN: Yesterday, yeah.
BESSENT: Who is the busiest person in D.C.
EISEN: Besides you.
BESSENT: When whenever I feel sorry for myself, I look at Jamieson and his team because they do all, not only do they do big picture, they do all the details, they dot the I's, cross the T's, but he has done a fantastic job of negotiating for U.S. companies selling abroad. So, we put on a tariff, but we also level, we push down to zero or substantially down the tariffs that other countries have on us, the non-tariff trade barriers. You know, Indonesia made a very good deal, but I'm going to cuff the number, but I think they may have taken down the 9,000 tariff lines and non-tariff trade barriers, you know, domestic content rules. So, much—
EISEN: So, we sell more?
BESSENT: We sell more, and companies make more when they sell it.
EISEN: Right. How, which trade negotiations beyond China, which I know is occupying a lot of your attention lately, are you, are you most focused on?
BESSENT: I think we are about to finish up with Korea.
EISEN: Oh, is that going well?
BESSENT: It's—
EISEN: There was some question about the investment there.
BESSENT: Yeah, it -- as I said, the devil's in the details, but we are ironing out the details. I think there'll be again, good thing about IMF and World Bank Week brings a lot of people here. So, we'll be talking about that. The president had a very good meeting with Prime Minister Carney recently. So, I think U.S.-Canada's back on track. I know that the Mexican team has been engaged and India.
EISEN: India is happening soon. Are we going to see more announcements on the, on the trip to Asia later this month?
BESSENT: Yes. Yes. So, very good chance that I will go out early, meet with my Chinese counterpart, the vice premier, He Lifeng who I have great respect for. I will meet him before. So there two conferences, ASEAN in Malaysia. We're going to do a visit -- president's going to do a visit to Japan and then move to Korea for the APEC, A-P-E-C, conference, where the leaders as of right now will meet.
EISEN: The other big change on industrial policy from the administration has been around taking stakes in companies, private companies that you guys deem strategic and important for the U.S. I think there have been five now. Are there going to be more of those?
BESSENT: I wouldn't be surprised because again, many of these, when we get an announcement like this week with China on the rare earth, you realize we have to be self-sufficient, or we have to be sufficient with our allies. So, when you are facing a non-market economy like China, then you have to exercise industrial policy. So, on rare earth for 20 years, anytime -- rare earths are not rare. What is what is rare is the processing and refining—
EISEN: Which China dominates?
BESSENT: Which China dominates. I think they have 70 percent of the mining but 95 percent of the processing and refining. And for 20 years, anytime anyone in a market-based economy stood up a processor refiner, China came in, cut price, and put them out of business. So, we're going to set price floors and the forward buying to make sure that this doesn't happen again. And we're going to do it across a range of industries.
EISEN: I was going to say though, where do you stop? I mean, pharmaceuticals are really important for national security. Defense companies, we have the Pfizer CEO. We have the Northrop Grumman CEO. Are you going to be taking stakes in all of them?
BESSENT: I don't think we have to do that. I do think our defense companies are woefully behind in terms of deliveries. So, we may have to -- as their biggest customer may have to prod them to do a little more research, do a little few stock buybacks, which is really what got Boeing into trouble.
EISEN: Because you're such a big customer.
BESSENT: Sometimes we're—
EISEN: The only customer.
BESSENT: The only customer.
EISEN: Right. But what's the exit strategy for the government taking an equity stake?
BESSENT: Well, the equity stake, when you think about Intel, Intel was just the conversion of a grant. I was, I was with President Trump, Secretary Lutnick in the Oval when the Intel CEO was there and well, why don't we have a stake? Why don't we have the upside? We don't have any governance there. And then with these other deals, Mountain Pass would be one of the companies where it's a rare earth minor processor. But then you see private capital come in. You see Jamie Dimon said that JPMorgan is going to get into the business. They're going to be lending. They're, probably set up some kind of an exchange. They're anxious to work with us on a strategic, we have a strategic petroleum reserve.
EISEN: Right.
BESSENT: We're going to need a strategic mineral reserve. And you know, the private sector is coming in and that's part of the CapEx boom, too.
EISEN: But what do you say to people who say that sounds socialist? I mean, for government taking stakes in private companies, picking winners and losers, that's not how we do it in America.
BESSENT: Well, that's the reason we've got this rare earth problem. That it is, again, I -- that we're not going to come in and take stakes in nonstrategic industries, but we've identified seven industries. If anyone wants to read it, I wrote a paper on this about 15 months ago for a speech I delivered at the Manhattan Institute. And you know, I do believe, and you're pushing on this in a good way, that we do have to be very careful not to overreach. And we need to go back and examine, okay, have we accomplished our goal? And then, you know, you can move on. But we have to be vigilant. We have to be vigilant because for 20, 25 years, we haven't been vigilant. The leading Chinese rare earth company used to be owned by General Motors. Chinese bought it in 1995. CFIUS, which I chair, the Committee for Foreign Investment in the U.S., mandated that it stayed in the U.S. for five years. Guess what happened five years and one day?
EISEN: Went to China.
BESSENT: Went back to China.
EISEN: Yeah.
BESSENT: Nobody was watching. Everyone was asleep at the switch. So, we're just not going to be asleep at the switch.
EISEN: The other thing that is keeping you very busy, as if this weren't all enough, is the is the interview process for the next Fed chair.
BESSENT: Yeah.
EISEN: Which we're very eager to hear an update about. So, have you narrowed it down to five or three or one?
BESSENT: Well, I can tell you, there are 330 million Americans, you're talking to the one who's not going to be the Fed chair.
EISEN: Okay, thanks for clearing that up.
BESSENT: But it's been a great process. The 11 candidates we started out with were all strong candidates. As someone again who is a professor of economic history, I've learned so much from the candidates, and we've narrowed it down to five.
EISEN: Okay.
BESSENT: That we will have to push out the next round to after the Asia trip. So, I suspect that that will go on in November and then likely sometime after Thanksgiving, in December, we'll present the president with three or four candidates for him to interview. It's, at the end of the day, he'll take input like he always does from dozens, hundreds of people and then make a decision.
EISEN: Is one of the criteria to be the next Fed chair to want lower rates?
BESSENT: One of the criteria is to have an open mind because if we go back and look, I just reread Bob Woodward's book on Alan Greenspan called "Maestro". So why was Alan Greenspan the maestro? Because he had an open mind. Because the '90s, I just mentioned, I think there, when I look at economic cycles, I think that the most analogous period to what we're seeing now is the '90s. And it would have been very easy for Alan Greenspan to kill the Internet boom, stop the, not be open to the idea that there was a productivity boom and slam on the brakes. Instead, he had a different view and let the economy believe that there could be substantial non-inflationary growth. So, two of the criteria for me. One, do you have an open mind? What's your theory of the case? Where are we here? And then the other thing too is, this Federal Reserve job, we ask someone to be this monetary policy icon, but this is also a gigantic sprawling organization that does payments, regulation. So, you know, they also, there also needs to be a management level here.
EISEN: Right. So, that's part of the interview process.
BESSENT: Part of the interview process.
EISEN: Okay. What, quickly, what is gold telling you? At record highs, up more than 50 percent this year?
BESSENT: That there are more buyers than sellers.
EISEN: Does it say something about—
BESSENT: That we, that we, that for many years, gold mining, the amount of actual gold mining went down, and I don't think it's necessarily—
EISEN: You don't think it's like some sign of anxiety or questions about reliability of the U.S. dollar and U.S. assets?
BESSENT: Well, I don't know why everyone comes back to the dollar. We are the only G7 country. Our ten-year rates are down 50 basis points. Everyone else's are up. And you know, if you look at the Chinese, excuse me, the Japanese rates, like the percentage move is gigantic. And—
EISEN: But the dollar is down 10 percent this year.
BESSENT: It is, it is down 6.7.
EISEN: Oh, well, it was down 10 two weeks ago.
BESSENT: But it, again, good thing about being a historian, not an economist that I rely on facts, not theory. So, if I go back—
EISEN: Are you looking at trade weighted dollar? Is that or—
BESSENT: I am looking at trade weighted dollar.
EISEN: Okay, that's why—
BESSENT: Well, because it's just a euro move.
EISEN: Yes.
BESSENT: And the -- like any currency theory would tell you when you get a bigger fiscal span, currency's strong, so euro should be strong. But what we're seeing in President Trump's first term, the dollar bottomed almost to the day that the tax bill was passed in December 2017. Go back and look at a chart, guess when the dollar bottomed. Right around July 4th when the One Big, Beautiful Bill was passed.
EISEN: Why? Because the outlook for the economy changes?
BESSENT: Yeah. The certainty, the, what we're seeing flow in. You know, the other thing that happened was to get ahead of the tariffs, there was a massive amount of the U.S. current account deficit ballooned. So, more dollars ended up overseas. Now that we have a more formalized tariff regime, you know, there's not this big rush. We're seeing the U.S. current accounts start to deficit and trade, or the trade deficit start to contract. So that should be very supportive for the dollar.
EISEN: So, we've talked about a lot of different policies and a lot of what you've been doing. Clearly, you're optimistic. What is the single factor that's making you most bullish right now, on our chances?
BESSENT: I've got to say it's exactly the topic of this conference is that the private sector in the U.S. has been unleashed and the best thing the government can do is put in the guardrails but stay out of the way. And the substantial deregulation and the focus on business and you know, I think that this is exactly what President Trump wanted. It's what I call parallel prosperity. Main Street does well, Wall Street does well because, you know, for a long time, you can have the, these jobless, the stock market booms and the president is laser-focused that we are laser focused on small banks because small and community banks drive Main Street. They do the small business lending. They do the ag lending. They do the commercial real estate lending. So, you know, I am just very optimistic that after kind of being in hibernation or maybe even the fetal position for four years under the previous administration, that these industries and again, whether it's Main Street or our great tech companies are all coming alive. The energy industry is back on its front foot. We're going to complete pipelines and we're going to drill again. So, you know, I think that it is that, and I think we can be in a period like the late 1800s when the railroads came in, like the 1990s when we got the Internet and office tech boom. I think there's a very good chance here that the U.S., we're drawing in all this capital and, you know, when I go around the world, I look. And I just there's nothing like this in terms of, you know, we have energy, we have great reg, we have great tax policy. We have great certainty in our tax policy because, you know, I would go back to this now that imagine if we didn't have the certainty in our tax policy, and we had not the, you know, thanks to President Trump's leadership, Speaker Johnson, Leader Thune, if we had not gotten the One Big, Beautiful Bill done on July 4th, it'd be a mess now. So, you know, the government shut down, but we can fall back on the tax policy, the 100 percent expensing. But then on the other side, they're President Trump's campaign promises of no tax on tips, no tax on overtime—
EISEN: Yeah.
BESSENT: The small tax if any, or no tax on Social Security, buy an American car, and you can deduct the interest. And those are for working people. So, it's the big companies and working people.
EISEN: Well, it's a perfect way to end it, and a perfect tie-in to the, to the conference and to our next panel of corporate executives. Secretary Bessent, thank you very much for the time today.
BESSENT: Thank you. Thank you.