October 28, 2026
WHEN: Today, Wednesday October 28, 2026
WHERE: CNBC’s “Closing Bell: Overtime”
Following is the unofficial transcript of a CNBC exclusive interview with U.S. Treasury Secretary Scott Bessent on CNBC’s “Closing Bell: Overtime” (M-F, 4PM-5PM ET) today, Wednesday, October 28. Following are links to video on CNBC.com: https://www.cnbc.com/video/2026/10/28/watch-cnbcs-full-interview-with-treasury-secretary-scott-bessent.html, https://www.cnbc.com/video/2026/10/28/treasury-sec-scott-bessent-we-are-getting-an-energy-supply-shock-here.html, https://www.cnbc.com/video/2026/10/28/treasury-sec-scott-bessent-bond-market-has-done-a-lot-of-tightening-for-us.html, and https://www.cnbc.com/video/2026/10/28/treasury-sec-scott-bessent-i-dont-think-credit-in-the-ai-space-is-problematic.html.
All references must be sourced to CNBC.
BRIAN SULLIVAN: Mike, thank you very much. Do appreciate that. I know there's a lot going on with Microsoft and Google earnings. So Treasury Secretary Scott Bessent, really appreciate you making some time for us here on CNBC. Thank you, sir.
SCOTT BESSENT: Good to be with you.
SULLIVAN: Well, it's good to be here at the U.S. Treasury. Actually, I want to get to Microsoft and Google indirectly in one moment. But first, your reaction, Federal Reserve no change on rates. Changing the meeting schedule for next year and in 2028. But give us your first read and take on Kevin Warsh and the Federal Reserve.
BESSENT: Look, I think Chair Warsh is off to a great start. And as I often say, I have great confidence in him. But more importantly, the President has great confidence in him to find the right balance between the Fed's dual mandate of full employment and the inflation mandate. And I think he continues to fulfill that.
SULLIVAN: You know, there is a school of thought that the Federal Reserve doesn't have a lot of control over the inflation as we see it now, that when you look at energy prices, war, Russia, Iran, when you look at input costs, a lot of it caused by energy prices, the inflation that we're seeing that the Fed is, quote, “fighting,” is not really something the Fed has the power to fight. What do you think about that?
BESSENT: Well, I've said that often. And as I've said when I led the search for the Fed chair, that President Trump obviously had the final decision, was, I would like a chair with an open mind, just as Alan Greenspan had in the '90s. And I think we are getting an energy supply shock here. And you might remember in 2008, in the summer, I think one of the great, the fails or policy errors in central banking history was when the ECB hiked into a similar energy price shock. And then, you know, we obviously saw what happened in September of '08, the GFC. So I think they should have an open mind in terms of the transitory nature of the supply shock.
SULLIVAN: So would you view then any future interest rate hikes as a policy mistake?
BESSENT: That's not necessarily so because, again, the Fed, I believe, raised their terminology today in the, in the statement, they seemed to insinuate that they believe that the economy is accelerating. I think we're going to get, I haven't seen it yet, but I think we're going to get a strong GDP number for the third quarter. Atlanta Fed is well over 3 percent.
SULLIVAN: Yeah. That, that number will come out tomorrow. You know, going back to your hedge fund days, there is also, there are people who I've talked to, we've talked about it actually on, on our Federal Reserve show today on the air, which is that if the Fed were to, let's just say, cut rates by 1 percent, I mean, they're not going to, but we're going to sort of theorize here, if they cut rates by 100 basis points, that bond yields would go up. In other words, the bond market might be running the show more than the Federal Reserve. What do you think about that?
BESSENT: Well, I think we can look back to the Fed's very large rate cut before, before the election in 2024. You know, we saw a 50-basis point rate cut and 10-year yields have, they've never been lower since then. So the 10-year yield never looked back. So, look, the curve, there are a lot of things that influence the curve. It could be the term premium. It can be exogenous factors. So, you know, I, I always had great respect for the bond market. And as Chair Warsh said in the July decision, that the bond market has done a lot of tightening for us.
SULLIVAN: Are, are you frustrated by, is the President frustrated by 5 percent real 10-year yields?
BESSENT: Well, well, it's nominal yields.
SULLIVAN: Nominal yields, apologies.
BESSENT: Yeah. So I, I think that we both believe that, that we will get to the other side of this Iran conflict. And the oil market is going to be better supplied on the other side.
SULLIVAN: And how much of that do you think is playing into where bond yields are and the economy may go, the price of oil, which is also related to things that are largely out of our control or maybe out of our direct control?
BESSENT: Well, I do think what the Fed is very attentive to is they, they have been above target for a long time. And I think in some of the board members' minds that, that the time has gone on too long and it may show a lack of will. I, I don't think it has to. But importantly, I think that we've seen a very high correlation between oil prices and the 10-year, the 30-year, the longer end of the market and between crack spreads.
SULLIVAN: Yeah. And as long as oil then remains elevated from where it was, I would anticipate then that you, sir, the secretary of the treasury, would anticipate yields to sort of remain where they are.
BESSENT: Thus far. And, look, as I said, I have great confidence in Chair Warsh to steer, steer the Fed between the right combination of growth and inflation, because what you don't want to do is cause enough of a growth slowdown that energy consumption would drop.
SULLIVAN: This might be a better question for the secretary of war, but I will, I will ask you, because part of the economic blockade of, of Iran has come from your office, and it appears to be working. They're exporting effectively zero barrels of oil. Their currency has collapsed.
BESSENT: Yeah, probably for the first time since Iran started producing oil, they have no barrels of oil on the water.
SULLIVAN: Zero.
BESSENT: Zero.
SULLIVAN: Some in storage, I think.
BESSENT: Well, they have some stored behind the blockade.
SULLIVAN: Yep. And their currency has collapsed. But then there are others who might think, well, they're, they can go on longer than we think. Do you have a timeline on how long it might take to bring Iran to that negotiating table based on their, their economy right now?
BESSENT: Well, I don't have a timeline, but what I can tell you is last Wednesday was the eight-week anniversary of Economic, Operation Economic Outcast, and it has been very successful. This is the toughest operation ever to isolate a single economy in the history of the world. And we can see both in the data that, you said, the currency has collapsed. It's collapsed so much that you can be arrested for printing the level of the currency. So, you know, it may be through 3 million rials. We have internal estimates that show that the economy from March to March, when the blockade started or the conflict started, March to March, the economy may contract by as much as 25 percent. To put that in perspective, for the three years after the Iron Curtain came down, the Russian economy contracted 22. So in one year, it would do what happened in 22 years. And we are seeing, as you know, there are three pillars to the Iranian regime. They're the politicians, the elected officials, the IRGC, and the supreme leader in the religious column. And in the summer, the elected officials started worrying out loud about the economy. Now, publicly and privately, the IRGC is very concerned. They're talking about a collapse. And part of, part of my worry is that many of the IRGC members are kind of like rats in a sewer pipe. They are afraid for their lives. So they're—
SULLIVAN: They're going to fight.
BESSENT: Oh, no, they're, they're bunkered down.
SULLIVAN: OK. But they, but I worry that makes them dangerous as well.
BESSENT: Well, it, it makes them unattentive to what's happening. And then the ayatollah is isolated. But the, the rubber is meeting the road. They're not able to pay their troops. Importantly, they're not able to get dollars. So they're not able to replenish. What we are also seeing, too, their proxies, whether it's the Houthis, Hamas, or Hezbollah, you know, their funding is being cut off. And that's kind of the tip of the spear, when that money starts going down.
SULLIVAN: So quickly, Microsoft, Google earnings out. Big top story, obviously. These are huge, great American companies. Stocks are doing well. Are you worried though about the lower end of the credit spectrum? Some of the, some of the junk bonds, some of the AI-related debt has started to, I mean, we're looking at double-digit yields for some of this debt. How much is this on your radar, sir?
BESSENT: Look, we, we, we monitor all of this. I don't think it's problematic at all because, you know, we're seeing that that's the, the neo-clouds are a small component of the overall ecosystem. And we're still seeing the financing getting done. We're still seeing the deals get done. And we're also seeing companies like Meta decide to finance with equity.
SULLIVAN: Yeah, they are. And two more questions, if we have time, and I appreciate the time, again, that you have today. Number one, I want to talk very quickly, last time we spoke, we were in Paris, France, Europe. France looks a lot different now than it did basically a year-and-a-half ago. Are you worried about France or European debts and deficits leading to some larger global economic problem?
BESSENT: Well, first thing I will say is—
SULLIVAN: I hate to say black swan, but you know what I mean.
BESSENT: Yeah. I will say, I know the French finance minister very well, and President Macron has a great economic team. They've got a tough hand. And at the G20 in Asheville, North Carolina, in August, we pushed all the G20 members toward growth. We said that the biggest risk to financial stability is a lack of growth. And I think that's what we're now seeing in Europe. Because the U.S., we have this temporary price spike. We have, as you said, 5 percent 10-year, but our nominal growth is much higher, much higher. And, you know, I think at a point, the nominal growth, the components of the nominal growth will switch. We'll have a greater real growth component, lower inflation component. But that will keep powers on. So, you know, I, I worry in general it's just the lack of growth. And we've been kind of saying that to our allies for months.
SULLIVAN: Yeah, their debt's yielding the same as ours. They have almost no growth and their currency continues to go down. I've got to ask, we are in D.C., so I will ask this question because you were out campaigning recently. How important is the midterm election for this administration's economic agenda and plan?
BESSENT: Well, I think a lot of it is baked in. So what we're seeing, Working Families Tax Cut, aka the One Big Beautiful Bill, very powerful bill. You know, on one side, great incentives for business, full deduction and expensing for equipment for factories, for ag structures. On the other side, the president's four signature tax policies, no tax on tips, no tax on overtime, no tax on Social Security, and deductibility of American-made, all those, the interest. So the consumer is, consumer surveys can be a little gloomy, but the consumer behavior is quite strong. Corporate behavior is actually quite strong. And, you know, I think with tax policy, trade policy, energy policy, and regulatory policy, we've got a very good mix that I—
SULLIVAN: Are you happy with tariffs where they are? I know we have to go. We've got a lot of earnings. But tariffs, any plan to change the tariff structure?
BESSENT: USTR Jamieson Greer is doing a fantastic job. I think he still has a 301 study outstanding. But in general, aside from Mexico and Canada, which is a USTR renegotiation, the, the trade deals are pretty locked in.
SULLIVAN: Treasury Secretary Scott Bessent, Mr. Secretary, really appreciate you sitting down with CNBC on a very busy day. Thank you, sir.
BESSENT: Good to see you.
SULLIVAN: Melissa, I appreciate it, thank you. I'll send it back to you and Mike.
For more information contact:
Stephanie Hirlemann
CNBC
