• Kevin Hassett forecasts U.S. GDP growth of 2-2.5% in Q1 2025, pointing to strong job creation and easing inflation.
  • The former Trump economic advisor credits tax cuts, deregulation, and trade policy shifts for the optimistic outlook.
  • While acknowledging short-term market uncertainty, Hassett maintains long-term growth will outweigh current challenges.

Hassett's Bullish Economic Forecast

Kevin Hassett, former National Economic Council director under President Trump, has projected robust U.S. economic growth through 2025, telling The Lion that GDP will rise to 2-2.5% in the first quarter of next year. His optimism stems from recent positive indicators including 10,000 new manufacturing jobs and 9,000 auto sector jobs added in recent months.

The economist pointed to February's consumer price index data - which rose 2.8% year-over-year, below expectations - as evidence that inflation concerns may be easing. "Think a year from now: is the U.S. economy going to be way better or way worse? And it's obviously got to be way better," Hassett said in the interview.

Policy Drivers Behind the Projections

Hassett attributes the anticipated growth primarily to Trump-era economic policies that he expects will continue or expand. These include potential extensions of the 2017 tax cuts, aggressive deregulation efforts, and changes to trade policy including tariffs. He specifically cited ending "crazy DEI stuff" as improving workforce meritocracy.

While acknowledging these policies create short-term market uncertainty, Hassett maintains they'll ultimately produce "stronger profit growth, stronger wage growth and so markets will be fine." His views reflect his 2006 research suggesting corporate tax burdens largely impact workers through lower wages - a perspective shaping current tax policy discussions.

Challenges Amid the Optimism

Despite the positive outlook, Hassett recognizes significant hurdles including the nation's $36 trillion debt (projected to hit $59 trillion by 2035) and ongoing inflation concerns. The administration's approach to these issues, particularly potential entitlement reforms, could determine whether the projected growth proves sustainable.

Market analysts note that while recent data supports Hassett's projections, global economic headwinds and domestic political factors could alter the trajectory. The coming months will test whether current policies can indeed deliver the 3% GDP growth and substantial real wage increases Hassett claims characterized Trump's first term.