Treasury Secretary Scott Bessent is trying to sell a faster-growth story for the U.S. economy, even as recent data and prediction-market pricing point to a more modest path. He said the economy can produce “something with a three in front of it” this year, while first-quarter GDP rose 1.6% after 0.5% growth in the fourth quarter of 2025.
Growth versus pricing
Kalshi traders are not pricing Bessent’s target as the most likely outcome. On a contract tied to 2026 GDP growth, traders assigned Kalshi odds at 14.2% to growth landing between 2.6% and 3.0%, with a higher probability attached to the 2.1% to 2.5% range. The contract resolves after the Bureau of Economic Analysis verifies the annual GDP figure.
Bessent tied his confidence partly to the new Federal Reserve chair, Kevin Warsh. In New York, he said he was confident Warsh would “optimize the path for both inflation and economic growth,” and he predicted inflation will retreat as the Iran conflict subsides. Separately, consumer prices rose 0.5% from April to May, and the annual inflation rate reached 4.2%, the largest year-over-year increase in three years.
The Fed angle matters for markets. Bessent backed Warsh’s move to reduce forward guidance, the Fed’s practice of giving investors hints about where interest rates may go. He also supported dropping the “dot plot,” the quarterly chart of policymakers’ rate projections, saying market participants had started leaning on it as a crutch. Warsh has convened a task force to review the Fed’s communications practices, including the dot plot, which has been published four times a year since 2012.
Bessent’s broader “3-3-3” plan remains a stretch goal: 3% GDP growth, a 3% deficit-to-GDP ratio, and 3 million additional barrels of daily domestic oil production. Kalshi traders gave only a 13% chance that the federal deficit-to-GDP ratio falls below 5% for fiscal 2026, a contract that will be verified after a joint Treasury and Office of Management and Budget statement.
