U.S. Treasury Secretary Scott Bessent predicts a significant increase in revenue from President Trump’s tariffs, aiming to use the funds to pay down the federal debt rather than issue rebate checks to Americans. Bessent expects to revise his estimate of $300 billion upwards but did not provide specifics.

Bessent emphasizes the focus on debt reduction over creating a dividend for Americans with tariff revenue. He projects a substantial increase in revenue beyond the initial estimate of $300 billion, aiming to lower the deficit to GDP ratio and start paying down the debt.

Bessent foresees potential for the U.S. economy to return to low-inflation growth seen in the 1990s but attributes challenges in housing and high credit card debt among lower-income households to elevated interest rates. He suggests a rate cut by the Federal Reserve could spur home building and alleviate economic pressures.

The U.S. Census Bureau reports a slight rise in single-family home construction and future permits in July, despite obstacles like high mortgage rates and economic uncertainty. The housing market continues to face challenges, impacting home purchases amid ongoing economic dynamics.

President Trump’s tariffs have deterred the Federal Reserve from lowering interest rates, as policymakers remain cautious about potential inflation risks. Softening job market indicators have fueled expectations for a rate cut in September, contributing to a decline in mortgage rates and easing financial pressures.

Bessent previously advocated for a 50-basis-point rate reduction, emphasizing the need for monetary policy adjustments. Investors anticipate a quarter-point rate cut at the upcoming Fed meeting in response to recent economic developments and market conditions.

Read more at Yahoo Finance: Bessent says US tariff revenues to rise ‘substantially,’ focus on reducing debt