• Treasury Secretary Scott Bessent projects inflation will decline in the coming year, pointing to moderating service sector costs as a primary driver.
  • Bessent's comments, made in late November 2025, explicitly reject the notion that recent tariffs are a significant contributor to current price pressures.
  • The administration points to specific near-term price relief, including lower Thanksgiving meal costs and expected declines in healthcare expenses.

Treasury Secretary Scott Bessent has laid out a case for inflation easing in 2026, arguing that price pressures are largely domestic and tied to the service economy, not imported goods or recent trade policies. In comments made over the weekend of November 23-24, Bessent pushed back against critics who link inflation to tariffs, stating flatly that price increases "have nothing to do with tariffs."

Instead, Bessent framed the current inflationary environment as a story about the service sector. "Inflation is a service economy story," he said, suggesting that as pressures in this broad category—which includes everything from healthcare and hospitality to financial services—begin to moderate, the overall inflation rate will follow. This perspective shifts the focus away from global supply chains and goods, which dominated the inflation narrative in the early 2020s, and toward domestic labor markets and consumer demand for services.

The administration is banking on visible, near-term price declines to bolster public confidence in its economic stewardship. Bessent pointed to the cost of a Thanksgiving dinner, which he said was lower this year, as a tangible example of progress. He also indicated that prices in specific areas, like healthcare, are expected to come down "in the coming weeks," according to people familiar with the internal forecasts. These targeted drops are seen as precursors to a broader disinflationary trend taking hold next year.

Efforts to message this economic turning point are delicate. The Treasury Secretary's direct rebuttal of the tariff-inflation link is a clear attempt to neutralize a potent political argument. By attributing inflation to the service sector—a complex, slow-moving component of the economy—the administration is setting expectations for a gradual, rather than sudden, improvement in price data. Market participants will be closely watching upcoming Consumer Price Index reports for signs that Bessent's predicted roll is beginning, particularly in core services excluding housing, a metric watched closely by the Federal Reserve.

A spokesperson for the Treasury Department did not immediately respond to a request for additional comment on the specific timing or magnitude of the forecasted decline. While the Secretary expressed confidence, some independent economists caution that wage growth in the service industry remains stubborn, which could prolong the journey back to the Fed's 2% target. The success of this forecast will likely have significant implications for both monetary policy and the political landscape as the 2026 midterm elections approach.