In a statement that has stirred both Wall Street and Washington, Treasury Secretary Scott Bessent declared on Sunday that the recent correction in U.S. stock markets should be viewed as a healthy and necessary development, rather than a cause for panic. Speaking on NBC’s “Meet the Press,” Bessent emphasized that such declines are part of the natural market cycle and can help stabilize overly exuberant trends.
“I’ve been in the investment business for 35 years, and I can Treasury tell you that corrections are healthy. They’re normal. What’s not healthy is when markets move straight up — that’s how you get a financial crisis,” Bessent asserted during the televised interview.
His remarks come as the S&P 500 and Nasdaq Composite recently entered correction territory — defined as a drop of at least 10% from a recent peak — amid growing concerns about trade tariffs and recession risks in the early weeks of President Trump’s second term. The S&P 500, which had reached a Treasury high of 6144.15 on February 19, 2025, has since declined by more than 10%.
A Shift in Tone from the Treasury
Traditionally, U.S. Treasury officials avoid endorsing market downturns, as such statements risk shaking investor confidence. However, Bessent’s comments reflect a pragmatic approach to market dynamics, suggesting that short-term declines can help prevent more severe economic dislocations in the long term.
His perspective challenges the often reactionary sentiment in financial markets, where even minor pullbacks can trigger widespread anxiety. Instead, Bessent highlighted the importance of distinguishing between healthy corrections and systemic crises.
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Historical Context Supports the View
Market analysts have pointed out that corrections are not unusual. Data from Gateway Financial Advisors indicates that the S&P 500 has experienced dozens of corrections over recent decades. In most cases, these did not spiral into full-blown bear markets, defined as a 20% or more drop from peak levels.
According to Carson Investment Research’s Ryan Detrick, only about 25% of corrections since World War II have led to bear markets. “More often than not, markets rebound strongly after a correction,” Detrick noted on social media.
Research from Clearnomics, shared by Covenant Wealth Advisors, further supports this trend. Historically, the average correction takes about five months to bottom out, followed by a four-month recovery period. Interestingly, market performance one year after a correction is typically robust. Between 1997 and 2020, the S&P 500 rose by an average of 32% in the 12 months following a correction.
Market Turbulence and Political Crosswinds
The timing of the correction has fueled speculation about broader economic headwinds. Concerns about the administration’s trade policies and their impact on global supply chains have weighed heavily on investor sentiment. Fears of retaliatory tariffs and tightening credit conditions have also contributed to the recent sell-off.
While Bessent’s comments aim to calm nerves, they also underscore a shift in economic messaging from the Treasury Department — one that encourages a long-term perspective rather than short-term emotional reactions to market fluctuations.
Reactions from Wall Street
Financial professionals are divided in their response to Bessent’s remarks. Some appreciate the seasoned investment perspective he brings, seeing his comments as a realistic acknowledgment of market fundamentals.
“Bessent’s honesty is refreshing,” said Amanda Li, a portfolio strategist at Brighton Capital. “Corrections create buying opportunities and help eliminate excesses. His message might encourage more disciplined investment behavior.”
Others, however, caution that framing a correction as “healthy” Treasury could be misinterpreted as downplaying real economic risks. “The Treasury Secretary needs to strike a delicate balance. Too much optimism could overlook structural challenges,” noted economic analyst Derek Walsh.
The Bottom Line
While past performance is never a guarantee of future outcomes, Bessent’s commentary encourages a measured response to market fluctuations. Rather than triggering panic, his remarks could serve as a reminder that volatility is a natural feature of capital markets — and sometimes, a much-needed one.
As investors digest both the correction and the broader economic signals, all eyes will remain on upcoming fiscal policies and how they interact with global market forces. Whether Bessent’s reassuring tone will resonate in the long term remains to be seen — but for now, he’s made one thing clear: not every market drop is a disaster. Some are just part of the journey.
