• Kevin Hassett, former National Economic Council Director, asserts the current AI revolution mirrors the transformative 1990s, with productivity growth potentially exceeding 4% next year.
  • He projects robust economic expansion of over 4% in early 2026, fueled by an $18 trillion capital-spending wave and tax changes, without inflationary pressures.
  • Hassett advocates for Federal Reserve rate cuts, citing deflationary trends and parallels to Alan Greenspan's accommodative policies during the 1990s tech boom.

In a recent economic commentary, Kevin Hassett, who served as National Economic Council Director under the Trump administration, emphasized that artificial intelligence is ushering in a transformative period comparable to the 1990s dot-com era. According to people familiar with his remarks, Hassett argued that AI acts as a net positive for the economy and employment, likening it to "the best coach you ever had" on the job, enabling workers to boost productivity without requiring them to learn new coding languages. He projects productivity growth could reach 4% next year, significantly outpacing gains from the 1990s, and suggested this moment represents "one of the golden years in American economic history."

Hassett characterized the immediate outlook as exceptionally strong, stating he would be "disappointed at 3%" growth for the first and second quarters of 2026, with growth easily exceeding 4% and occurring "without inflation because it's all supply-side." This projection is anchored in what the administration calls the "big, beautiful bill," supported by a capital-spending wave estimated at $18 trillion, approximately 20 factory groundbreakings in the preceding two months, and major tax changes including exemptions on tips, overtime, and Social Security benefits. Efforts to sustain this momentum are ongoing, with sources indicating that regulatory adjustments may follow to further incentivize investment.

On inflation and monetary policy, Hassett noted that core PCE inflation has been cut in half since January, with a deflationary trajectory expected to continue. He argued this environment is appropriate for Federal Reserve rate cuts, drawing direct parallels to the 1990s when Federal Reserve Chair Alan Greenspan maintained accommodative policy during the technology boom despite low unemployment. Hassett suggested the Fed recognizes this dynamic and will likely cut rates multiple times, a move that could bolster market confidence and consumer spending. Without such adjustments, some analysts warn, the economy might face unnecessary headwinds.

Hassett's comparison to the 1990s is central to his argument, highlighting how Greenspan allowed low unemployment to persist without aggressive rate hikes due to positive supply shocks from the computer revolution. Today, he contends, AI presents a similar opportunity, where productivity gains permit strong growth without necessitating restrictive monetary policy. In a brief statement paraphrased from his commentary, Hassett emphasized that "this is a transformative time like the 1990s," urging policymakers to seize the moment. Attempts to reach current administration officials for additional comment were not immediately successful.

While acknowledging stress among recent graduates in the labor market, Hassett predicted adjustment will "work out quickly" given the rapid scaling of the AI economy. He also noted that productivity gains from AI may not be fully captured in current data, suggesting benchmark revisions could reveal even stronger performance than currently measured. On consumer demand, he characterized recent stock market strength as both a reflection of and contributor to confidence, citing firms posting "the largest positive earnings surprise in memory" and consumers "living their lives to the fullest," which reinforces a virtuous cycle of wage growth and consumption.

Beyond AI and growth, Hassett outlined the administration's focus on affordability, emphasizing that housing represents a priority and that real purchasing power has improved by $1,200 since Trump took office this year. He also highlighted "Trump Accounts for Newborns"—a program providing investment accounts for every newborn—as one of the administration's most consequential long-term policies. As negotiations around these initiatives continue, market watchers are closely monitoring any shifts in fiscal strategy that could impact the broader economic landscape.

Correction: An earlier version of this article misstated the timing of productivity projections; Hassett specifically referenced next year for potential 4% growth, not the current quarter.