The White House National Economic Council Director Kevin Hassett stated on Wednesday (May 6) that the U.S. economy is entering a new phase of growth driven by strong investment, spurred by the increase in productivity from artificial intelligence (AI) and government tax incentives. Hassett predicts that the economic growth rate for the coming months will reach 4%.
Hassett emphasized that the corporate tax relief policies in the “Big Beautiful Bill” implemented by the Trump administration, including restoring 100% bonus depreciation and research cost offsets, have successfully sparked a domestic capital expenditure boom (CapEx Boom) in the United States.
Currently, multinational companies including TSMC and Novartis have announced plans to build factories in the U.S. with a total investment value in the billions of dollars.
Hassett pointed out, “The U.S. is currently experiencing an unprecedented race to create jobs.”
He analyzed that the recent growth in import data is due to structural shifts, with the U.S. importing a large amount of precision equipment for chip production.
“We used to import toys from China, and now we are importing machines to manufacture chips,” Hassett said. “All the machines we imported this quarter will be put into operation in various factories and create job opportunities for the rest of the year.”
In addition to policy benefits, the widespread adoption of AI technology is seen as another driver of economic growth. Hassett analyzed that the productivity gains from AI are translating into increased profits for businesses and helping to maintain reasonable stock valuations.
He stated, “The surge in productivity driven by AI is boosting corporate profits. Although the stock market is soaring, the current valuation multiples are not alarming at all, so I believe there is still a lot of room for further growth overall.”
Regarding employment and consumer spending, Hassett maintains a relatively optimistic stance. He mentioned that the number of initial claims for unemployment benefits is at a historic low since the 1960s. Furthermore, measures such as the exemption of small fees and tax-free social welfare benefits are putting more money in consumers’ pockets, leading to significantly increased credit card spending.
Hassett revealed, “In fact, yesterday, one of the top executives from one of the five major banks was in my office, and we looked at credit card data together.”
“As Secretary Benson said, credit card spending is surprisingly high; consumers are spending more on gas, but their spending in other areas is also increasing,” he said.
Addressing rumors of security vulnerabilities in the Mythos AI model from Anthropic, Hassett said the government is considering issuing an executive order to establish a safety review process for AI similar to the FDA.
He assured that multiple government departments are closely collaborating with the private sector to test and ensure that the U.S. maintains its leadership in AI while safeguarding national security.
The White House is eagerly anticipating Kevin Warsh to take over as Federal Reserve Chairman next week.
Although current Chairman Jay Powell has publicly stated that he will remain a board member, Hassett predicts that after understanding the White House’s lack of intention to threaten the independence of the Federal Reserve, Powell will step down at some point.
“I believe he will listen to reasoned opinions and eventually formally step down in the not too distant future,” Hassett said. “I can’t imagine he would find that position attractive enough to stay there for so long.”
In the diplomatic field, there have been reports of the U.S. and Iran nearing a memorandum of understanding (MOU), leading to a significant drop in oil prices, with West Texas Intermediate futures briefly falling below $90 per barrel, driving the three major U.S. stock indices higher.
Hassett stated that the Trump administration’s firm stance on safeguarding merchant ships could be a significant factor in Iran’s closer approach to reaching an agreement.
He pointed out that the U.S. negotiating team is currently in intense contact with the Iranian side, and there have been “a lot of movements” in the White House Situation Room recently, with an overall positive atmosphere. However, he also admitted, “With Iranians, you can never be sure.”