WHEN: Today, Thursday, October 2, 2025
WHERE: CNBC’s “Squawk Box”
Following is the unofficial transcript of a CNBC interview with U.S. Treasury Secretary Scott Bessent on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Thursday, October 2. Following are links to video on CNBC.com: https://www.cnbc.com/video/2025/10/02/treasury-secretary-scott-bessent-u-s-gdp-could-take-a-hit-from-government-shutdown.html and https://www.cnbc.com/video/2025/10/02/watch-cnbcs-full-interview-with-treasury-secretary-scott-bessent.html.
All references must be sourced to CNBC.
JOE KERNEN: We’re in day two of the government shutdown. Joining us now with where the administration stands on the latest, Treasury Secretary Scott Bessent. Scott, it helps to, Mr. Secretary, it helps to have seen the moon landing, doesn’t it? I mean, isn’t there something to beneficial about having some experience in life, or is it me?
SCOTT BESSENT: Joe, I find, good to be with you and Becky. I find wisdom’s good. I remember when my dad got me up early in the morning to watch the moon landing. So I think I was seven years old.
KERNEN: I know. Then we, you know, unlike some other people, we know it actually happened, and that the flag wasn’t waving.
BECKY QUICK: I wasn’t there. I didn’t see it, but I believe it.
KERNEN: Okay. Mr. Secretary, day two. I guess I’ll start with what we’re hearing from OMB and or at least rumors of possible real action taken to do some things permanently during this shutdown within the next 48 hours or so. Can you shed any light on whether that’s really going to happen, or was it a bargaining chip for Republicans to get Democrats to agree to keep the government open?
BESSENT: Well, Joe, let’s just step back for a minute and look how we got here. Chuck Schumer did the right thing in the spring and led the Senate to a clean CR. What we’ve got here is the House has the passed clean CR. The Republicans have the votes in the Senate. And he will not allow his members to come across. And what’s changed since then is, it’s his poll numbers, you know? So, you know, the president, Vice President Vance, Speaker Johnson, Leader Thune, they’re not negotiating with Chuck Schumer and Hakeem Jeffries. They’re negotiating with Representative Ocasio-Cortez, because she’s nipping at his heels. And, you know, so the American people are being held hostage by Chuck Schumer’s poll numbers. And, you know, we’re starting to see some of the moderate, the very few moderate members left in the Democratic Party in the Senate drift toward wanting a solution. Chuck Schumer’s blocking it. You know, when I look at Chuck Schumer and Hakeem Jeffries straight out of Brooklyn, makes me glad that I left New York in 2020. And your question about the shutdown, you know, this is a choice that Schumer and Hakeem Jeffries have made. And, you know, if they want to shut the government down, then there are ramifications.
KERNEN: Do you, I’m just wondering, do you think that there is it more than just bargaining then? Would the president, would Russ Vought, would they like to do some? I mean, they’ve already pulled back on some, you know, on some funding in some blue states for, I don’t know, climate initiatives. So, they’re going ahead with some of these things. Do you think they’d like to finally shrink the size of the federal government and use this as the opportunity? Or are they hoping that we get things settled within the next couple of days, then, that they don’t have to do that?
BESSENT: Well, what they want is what’s good for the American people, and what’s good for the country is a clean CR. You know, the Democrats want to negotiate, you know, in the, you know, like terrorists. They want to say, like, this is what we have to have. And if we don’t get it, we’re going to close down the government. So what President Trump, Vice President Vance and the Republican leadership want is for the Democratic side to show a little leadership. And I don’t think it’s unreasonable for the president to use all the levers because, Joe, what they are asking for, they’re asking for $1.5 trillion increase in spending. And let’s just go back. That would be almost as big as the ill-fated IRA, which caused the worst inflation in half a century. So, they want to put this inflationary impulse into President Trump’s already strong economy. The economy is growing at 3.8 percent. We don’t need 1.5 trillion pumped in. The Democrats seem to love inflation.
QUICK: But getting back to Joe’s kind of premise on this, are these furloughs or job layoffs in the federal government, are those going to come anyway? Because that’s what the Democrats have suggested, that, you know, the Trump administration is going to push forward with layoffs and with furloughs anyway, whether they do this or not. Is that true?
BESSENT: Again, you know, it’s a talking point. Senator Schumer, Representative Jeffries, you know, they’re weak. They’re discombobulated. They are, they don’t represent the American people. And, you know, they’re making up excuses. So, you know, we’ll see. I think that this is an opportunity. And, you know, they’re using this opportunity. President Trump in the first nine months now has been unstoppable. They’ve tried to stop him in the courts. They’ve tried to stop him in the press. And now, they’re trying to stop him with this shutdown.
KERNEN: Yeah. Mr. Secretary, there’s a piece yesterday, an op-ed piece in “The Journal”, I think, from the editors themselves that said it — they were urging Republicans not to get soft on some of the Medicare, I’m sorry, Medicaid cuts that we saw in the OBB, and that they’re starting to see some buyer’s remorse from moderate Republicans in their willingness maybe to talk about extending these COVID era Obamacare subsidies. I mean, it but the way Obamacare is right now, and, I don’t know, maybe you’re good with, you know, you were in investment banking. You can design something perhaps better because that’s why we’re in this mess. That’s why we need these subsidies right now, because it doesn’t work the way it was intended. And all the unintended consequences of Obamacare are coming home to roost at this point. That’s why we need a trillion and a half dollars to try to keep it afloat. Can you fix it? What would you do?
BESSENT: Well, Joe, you know, what we’re seeing is President Trump’s leadership. We’re seeing this what’s going to be a dramatic cut in prescription drug prices, which is one of the bigger parts of the health care budget. So, President Trump is laser-focused on that, negotiating with big pharma. And, you know, just to be clear, the spending cuts that occurred in the One Big, Beautiful Bill were the largest in history, and we’re not going to go back on them. That I came out from behind my desk and wanted to join the government to right the ship and get our fiscal house in order. We were left with a mess. It was the largest deficit when we weren’t in a recession, weren’t at war, and we are fixing the deficit. And, you know, there could be a discussion. But this isn’t the way to have a discussion. Shutting down the government—
KERNEN: Yeah.
BESSENT: And lowering the GDP. They, we have a 3.8 percent GDP and—
KERNEN: Right.
BESSENT: The Democrats shut down the government that we could, we could see a hit to the GDP, a hit to growth, and a hit to working Americans.
KERNEN: But do you, do you see that as the, what finally gets this done, some type of concession for Republicans to extend those COVID era super Obamacare subsidies? Is that what Republicans should be agreeing to have Democrats agree for the CR, to vote on the CR? Is that the way it should be done?
BESSENT: Well, I can guarantee you there’s not going to be an agreement the to get the CR. There may be an agreement to—
KERNEN: To talk?
BESSENT: To have talks. This is going to be a clean CR. When when Biden was president, the Republicans passed 13 CRs. We didn’t, we didn’t close down the government. And you know, again, as I said, what’s changed between now and the spring, it’s Senator Schumer’s poll numbers which are plummeting.
KERNEN: The move on to trade quickly. I don’t know. This never lasts that long, I don’t think, and the market never looks much at that the shutdown. So I figure, I don’t know, three or four days I think when it’s over. But can we talk, I don’t think we’ve ever talked soybeans in terms of China, but this is a real issue right now, that our farmers are getting caught up in the trade dispute. Can, is there anything the president can do or what do you expect to happen between the president and President Xi?
BESSENT: Well, there’s plenty the president can do. And it’s unfortunate that Chinese leadership has decided to use the American farmers, soybean farmers in particular, as a hostage or pawn in the trade negotiations. And American farmers overwhelmingly voted for President Trump, more than 90 percent. He loves the farmers. He loves them. We have great Secretary of Agriculture Brooke Rollins. Three of us were in the Oval yesterday, and you should expect some news on Tuesday on substantial report or substantial support for our farmers, especially the soybean farmers. They’ve had President Trump’s back and we’ve got their back.
QUICK: You own some, I believe you own a farm or property in North Dakota where you farm soybeans as well. What’s been the impact on your property, Scott?
BESSENT: Well, Becky, you know, there are two things here. One is the diminution of the Chinese buying. We’ve taken care of some of that with the trade deals. And almost every trade deal, there is a buying of American agricultural products. So, we’re going to see other countries substitute for China. And then on the other side, you know, I can tell you from personal experience, this is a record harvest, record harvest. So, you know, the American farmers, the American farm tech, there is an abundance here. There’s, the harvest is so big that we may run out, run out of storage. So that’s also affecting prices. And you know, on Tuesday you’re going to see substantial support for the farmers. And we’re also going to be working with the Farm Credit Bureau to make sure that the farmers have what they need for next planting season.
KERNEN: I want to get to Argentina at some point, Mr. Secretary, but I don’t want to ignore the Fed. Can you just tell us who your, who’s your favorite pick at this point for the next chairman and that we can get that out of the way and go right to Argentina? Can you give us a name?
BESSENT: Oh, sure, Joe, come a little closer. I’ll tell you.
KERNEN: Oh, you’ll whisper it to me.
BESSENT: Yeah. Yeah. So, Joe, yesterday we went over the halfway point. I’ve been tasked with interviewing 11 outstanding candidates. Some are at the Fed now. Some have been at the Fed. Some are from the private sector. And we’re going to continue the interviews this week. They took a pause because the Fed has what’s called a quiet period when around the meetings. So, we honor the quiet period. Didn’t interview anyone who was currently on the Fed board or a regional president before that. And I expect to have the first round of interviews completed by next week. Then we’ll go to the second round. And then, you know, expect to present President Trump with three to five very strong candidates.
KERNEN: I’ve had it, and as far as Argentina, I’ve had it said to me that that it’s in our best interest for Argentina to succeed because of the, finally, in South America, there’s a model for maybe a free-market economy or a capitalist economy. But that doesn’t help people that say America First should not include, you know, big help for another country. Where do you, how do you do? Can you justify us helping Milei? And it looks like we have interest down there or some of our, you know, wealthy Americans have interests down there, and the president’s helping them. Does it, does it make sense? Should we be doing this?
BESSENT: Well, first, first of all, Joe, you know, this trope that we’re helping out wealthy Americans with interest down there, the — couldn’t be more false. What we’re doing is maintaining a U.S. strategic interest in the Western hemisphere. America First doesn’t mean America alone. And look, when you have a failed state in South America like Venezuela, now we are having to track down and blow up these cartel ships. So, you know, you don’t want to create another failed state. It’s my belief that the Obama administration missed a generational opportunity during his eight years. Many of the governments down there moved from far left to center right. We did not support them. And then they took a hard lurch to the left. And now, Argentina is a beacon down there. And there’s a chance now for many other countries to come along, Bolivia, Ecuador, I think Colombia after the elections. So, what you don’t want are these failed economic models. And Argentina has 100 years of decline and President Milei is working against history, and he’s done a fantastic job. And I am sure that when we see the elections this month that he’s going to do well, his party will do well. The Argentinian people, especially the young people, what’s encouraging in Argentina, it’s the young people who made the decision not to impoverish their nation. And as far as what the U.S. is doing, just to be clear, we are giving them a swap line. We are not putting money into Argentina.
KERNEN: Okay. Well, we’ll just end quickly on China because we did have the Ambassador Perdue on yesterday. And I know, he was sort of calming. I think, you know, he met President Xi and was, had some corporate leaders over there that hadn’t been over in a while. And he wasn’t going to comment on trade. He said he’s more commenting on the relationship between the two countries, said that you would have to comment on trade. Any softening at all, any positive things happening right now that we could expect to see in the next couple of weeks?
BESSENT: Well, Joe, the most important thing we’re going to see is a meeting, a pull-aside meeting with President Trump and Party Chair Xi in Korea towards the end of the month. You know, as I lead the trade negotiations for the U.S. with my counterpart on the Chinese side, the vice premier, what gives us great comfort is the respect that the two leaders have for each other. So, it will be very helpful for them to be able to speak in person and set the framework for trade going forward. Our current trade agreement, we’ve been doing 90-day rolls with China expires on November 10th. So, I think with President Trump’s leadership and his relationship, the respect that Party Chair Xi has for him, that this round, which would be our fifth round of talks, should show a pretty big breakthrough and we can start talking about things, whether it’s ag purchases. And, Joe, to go back on the ag purchases, and President Trump’s phase one trade deal that was signed in January 2020, there were over $50 billion of ag purchases. They, the Chinese followed through during President Trump’s term in 2020. And then under President Biden, their feet were not held to the fire for these ag purchases. And at the meeting in Geneva, when I asked them, “Why didn’t you continue buying soybeans and the other products?” They had one word. Guess what it was. Biden.
KERNEN: Biden. Oh, that sounds like malarkey. Come on, man. Alright, Treasury Secretary Bessent, thanks. I appreciate it. We got some extra time this morning. I know you got, you’ve got things to do, places to go, people to see. But thanks for all your time. Appreciate it.
BESSENT: Good to see you.
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