U.S. Treasury Secretary Bessent recently dropped a "bombshell" in the media—some corners of the U.S. economy are already flashing warning signs, and he directly called out the Federal Reserve: It's time to cut rates.

These words are not spoken lightly. Bessent specifically pointed to two hard-hit areas: real estate and the job market. Single-family housing starts and permits have been dropping, and the combination of high home prices with high mortgage rates is a nightmare for homebuyers. The employment data doesn't look good either. Bessent even said that if these numbers had shown up six months earlier, the Fed should have acted this summer. His warning was very direct: if delays continue, recession might not just be a localized issue.

That said, the Treasury Secretary isn't entirely bearish. He's actually quite confident about 2026, citing rising capital expenditures, especially manufacturing investment returning to the U.S. This lines up perfectly with current policy direction—tariff protections combined with the "America First" manufacturing revival plan are indeed attracting companies to pour money into domestic factories.

Q4 2025 data could look pretty ugly, with a government shutdown expected to burn through $1.1 billion in economic output. But Bessent insists this is just short-term volatility and won't change the long-term growth trajectory.

From a big-picture perspective, the U.S. economy is now a classic case of "uneven heat." On one side, housing and jobs are under pressure; on the other, manufacturing investment is accelerating. For traders focused on macro trends, the Fed's next moves may be more important than any technical indicator—after all, the tightness or looseness of liquidity directly determines where the money flows.