U.S. Treasury Secretary Scott Bessent warned on Thursday that the ongoing government shutdown could deal a serious blow to America’s economic momentum, putting both growth and workers at risk.

“This isn’t how you conduct a debate — by shutting down the government and slowing the economy,” Bessent said in an interview on CNBC’s Squawk Box. “We could see a drop in GDP, a slowdown in growth, and real pain for working Americans.”

His comments came as the government entered its second day of closure, with lawmakers in Washington still unable to reach an agreement on a temporary funding measure that would keep federal agencies running.

After a sluggish start to the year, the U.S. economy had shown signs of solid recovery in recent months. Gross domestic product grew at an annualized rate of 3.8% in the second quarter, and the Atlanta Federal Reserve’s GDPNow model indicates that third-quarter growth likely matched that pace.

While past shutdowns have typically produced limited short-term economic effects, a lengthy stalemate could have more serious consequences — especially if President Donald Trump follows through on suggestions that he may permanently dismiss a large number of federal employees affected by the current closure. About 750,000 workers have been impacted so far.

When asked about that possibility, Bessent dismissed the notion as largely rhetorical. “Senator Schumer and Representative Jeffries — they’re disorganized and out of touch with the American people,” he said, referring to the Democratic leaders in Congress. “They’re just making excuses.”

The labor market, already under strain, remains one of the most vulnerable areas of the economy. Private-sector payrolls dropped by 32,000 in September, according to ADP data, signaling weaker hiring momentum. Though weekly jobless claims have remained relatively stable, announced layoffs this year have reached their highest level since 2020, when the pandemic first upended the job market, according to outplacement firm Challenger, Gray & Christmas.

Bessent also hinted at upcoming policy moves aimed at supporting the agricultural sector. He revealed that an announcement scheduled for Tuesday will outline “substantial support” for U.S. farmers, particularly those in the soybean industry who have faced challenges from volatile markets and trade uncertainties.

In addition, Bessent confirmed that the search for a new Federal Reserve Chair is underway, as Jerome Powell’s term is set to expire in May 2026. So far, he said, around eleven potential candidates have been interviewed, with the first round of discussions now complete. The second phase will begin next week, narrowing the field to three to five finalists who will ultimately be presented to President Trump for consideration.

As political gridlock continues to paralyze Washington, concerns are mounting that the shutdown could slow an economy that had only recently regained its stride — raising the stakes for both policymakers and millions of Americans who depend on a stable federal government to keep the nation running.