Treasury Secretary Scott Bessent said Americans are poised to see meaningful improvement on affordability in what he described as a “bountiful” 2026, as inflation eases and real wages climb under President Trump’s economic agenda.

“There are going to be substantial refunds to working American households in the first quarter,” Bessent said Tuesday, the New York Post reports.

“They will change their withholding. They will get an increase in real incomes. So, I am very optimistic for working Americans, for job growth, for capital formation. But we cannot let the Democrats shut down the government.”

Bessent argued that Trump’s tax, energy, and immigration policies are beginning to undo what he called the “worst inflation in 50 years,” which he blamed on the Biden administration and the Federal Reserve. He pointed to cooling rents, falling energy prices, and rising capital investment as early signs that pressure on household budgets is starting to ease.

Affordability has been a dominant concern for voters. Exit polls following last month’s “blue wave” in local elections showed it consistently ranking as a top issue, while consumer sentiment slid to its lowest level in more than three years, nearing a record low.

Still, Bessent said the groundwork being laid now will pay off next year, calling 2025 a period of preparation.

“Affordability has two components. There [is] constraining spending and then upping revenues, which is what we’re doing,” he said.

“I suspect that we are going to see a substantial drop in inflation in the first six months of next year.”

Bessent also highlighted easing rent pressures, linking them directly to tougher border enforcement.

“The mass, unfettered immigration, they have pushed up rents, especially for working Americans,” he said.

“So, President Trump, by enforcing the border, sending home more than 2 million illegals, we’re now seeing rents coming down substantially.”

Looking ahead, Bessent said he expects the U.S. economy to finish 2025 with 3.5% GDP growth, a narrower budget deficit, and stronger capital spending. He said that progress — combined with roughly $1,000 to $2,000 tax refunds in early 2026 and rising real wages — should help fuel faster growth next year.

Bessent pushed back on the Federal Reserve’s view that stronger growth inevitably fuels inflation, arguing instead that price pressures come from “friction,” when demand outpaces supply. He said Trump’s deregulation push will expand supply across the economy and keep inflation in check.

“We’re going to go back to the kind of non-inflationary growth where working Americans do better than supervised workers. Lower-income households do well,” Bessent said.

“Main Street, Wall Street can both do well. And my guess is both have a very good year next year.”

Recent economic data has been uneven, in part because the longest government shutdown on record delayed the release of key reports. The November jobs report, released Tuesday after weeks of delay, showed employers added 64,000 jobs, indicating steady hiring. However, the unemployment rate rose to 4.6%, its highest level since September 2021.

Meanwhile, the most recent Consumer Price Index showed inflation running at 3% in September — slightly below expectations but the fastest pace seen so far this year.