U.S. Treasury Secretary Scott Bessent said he expects a big jump in revenues from sweeping tariffs imposed by President Donald Trump, and said the money would be used first to start paying down the federal debt, not to give rebate checks to Americans.

Bessent, speaking in an interview on CNBC’s “Squawk Box,” said he expected to substantially revise upward his earlier estimate of $300 billion in revenues from the tariffs, but declined to be more specific.

Bessent said he had not spoken with Trump about the idea of using funds from the tariffs to create a dividend for Americans, but stressed that both of them were “laser-focused” on paying down the debt.

“I’ve been saying that tariff revenue could be $300 billion this year. I’m going to have to revise that up substantially,” Bessent said. “We’re going to bring down the deficit to GDP. We’ll start paying down the debt, and then at that point that can be used as an offset to the American people.”

The U.S. economy could return to the “good, low-inflationary growth” of the 1990s, Bessent said, but he blamed higher interest rates for problems plaguing some pockets of the economy, singling out housing and lower-income households with high credit card debt.

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A cut in the Federal Reserve’s key interest rate – which Trump has continually pressed for – could help facilitate a boom or pickup in home building, which would help keep prices down in one to two years, he said.

The U.S. Census Bureau on Tuesday reported a small increase in groundbreaking for single-family homes and permits for future construction in July, even as high mortgage rates and economic uncertainty continued to hamper home purchases.

Trump’s wide-ranging import tariffs have kept the Federal Reserve from lowering interest rates this year, with most central bank policymakers wary of easing borrowing costs until they have more confidence the levies will not rekindle inflation, which has yet to return to the Fed’s 2% target.

Recent indications of softening in the job market, however, have largely convinced investors that the Fed will cut rates by a quarter of a percentage point when it meets in mid-September. That expectation has helped bring down mortgage rates in recent weeks.

Bessent has previously said a 50-basis-point cut in rates was warranted.

(Reporting by Andrea ShalalEditing by Mark Potter and Leslie Adler)

North Korean leader Kim Jong Un said his country needed to rapidly expand its nuclear armament and called U.S.-South Korea military exercises an “obvious expression of their will to provoke war,” state media KCNA reported on Tuesday.

The United States and South Korea kicked off joint military drills this week, including testing an upgraded response to heightened North Korean nuclear threats.

Pyongyang regularly criticizes such drills as rehearsals for invasion and sometimes responds with weapons tests, but Seoul and Washington say they are purely defensive.

The 11-day annual exercises, called Ulchi Freedom Shield, will be on a similar scale to 2024 but adjusted by rescheduling 20 out of 40 field training events to September, South Korea’s military said earlier. Those delays come as South Korean President Lee Jae Myung says he wants to ease tensions with North Korea, though analysts are sceptical about Pyongyang’s response.

The exercises were a “clear expression of … their intention to remain most hostile and confrontational” to North Korea, Kim said during his visit to a navy destroyer on Monday, according to KCNA’s English translation of his remarks.

He said the security environment required the North to “rapidly expand” its nuclear armament, noting that recent U.S.-South Korea exercises involved a “nuclear element.”

Efforts by the United States and its allies to tackle North Korea’s development of nuclear weapons are expected to be discussed at an upcoming meeting between U.S. President Donald Trump and South Korean President Lee Jae Myung in Washington.

“Through this move, North Korea is demonstrating its refusal to accept denuclearisation and the will to irreversibly upgrade nuclear weapons,” said Hong Min, North Korea analyst at the Korea Institute for National Unification.

A report by the Federation of American Scientists last year concluded that while North Korea may have produced enough fissile material to build up to 90 nuclear warheads, it had likely assembled closer to 50.

North Korea plans to build a third 5,000-tonne Choe Hyon-class destroyer by October next year and is testing cruise and anti-air missiles for those warships.

(Reporting by Ju-min Park and Joyce Lee; Editing by Ed Davies and Stephen Coates)