• National Economic Council Director Kevin Hassett expresses confidence in navigating credit market challenges despite Moody's recent U.S. rating downgrade
  • Hassett projects strong 3-4% GDP growth in second half of 2025, driven by pending trade deals and tax clarity
  • Administration points to robust capital investment and deregulation efforts as counterweights to fiscal concerns

Kevin Hassett, Director of the National Economic Council, struck an optimistic tone on the resilience of U.S. credit markets Thursday, telling reporters that the administration remains confident it can "stay ahead of the curve" amid recent challenges including Moody's credit rating downgrade and ongoing market uncertainty.

Speaking at a briefing on economic outlook, Hassett dismissed the significance of Moody's recent downgrade of the federal credit rating, citing ongoing spending cuts, deregulation, and supply-side reforms as reasons for continued U.S. economic strength. "What we're seeing in the real economy tells a different story than the rating agencies," Hassett said, according to people familiar with his remarks.

The administration's top economic advisor predicted strong U.S. economic growth in the latter half of 2025, potentially exceeding 3-4% annual GDP growth, driven by impending trade deals, clarity on tax cuts, and robust job numbers. His comments come as first quarter capital equipment investment has already exceeded 20%, signaling private sector anticipation of economic acceleration.

Efforts to bolster market confidence appear timed to counter concerns about persistent fiscal deficits that prompted Moody's downgrade. Hassett's public statements are intended to signal that policy actions are actively addressing risks in credit markets, with the administration prioritizing spending cuts and regulatory reforms to counteract negative effects from the rating action.

Trade negotiations have produced deals with several major trading partners, and more agreements are anticipated, which are expected to open foreign markets and reconfigure tariff structures. Corporate leaders and gig economy firms are reportedly supporting major legislation aimed at stimulating further growth—the so-called "Big Beautiful Bill"—that would reshape tax and trade policy.

Hassett's optimism is rooted in modeling and macroeconomic estimates used during previous policies, which he claims correctly predicted growth effects from past reforms. When reached for comment, a Treasury Department spokesperson declined to elaborate beyond Hassett's public remarks.

Market participants appear divided on the administration's confidence. "The fundamentals show strength, but credit markets remain sensitive to fiscal developments," said one fixed-income strategist who asked not to be named discussing client positioning. "The next few months of economic data will be critical."

Correction: An earlier version misstated the timing of projected GDP growth. Hassett projects acceleration in the second half of 2025, not 2024.