National Economic Council Director Kevin Hassett projected that U.S. GDP growth could exceed 5%, potentially reaching 6%, amid a surge in capital spending. The optimism stems from a 3.3% jump in investment in March alone, which Hassett attributed to the Trump administration's tax policies and onshoring efforts. He argued that the current 2% GDP growth rate is partially due to record imports of capital goods for factory construction, and once these factories become operational, growth could accelerate significantly.
Hassett also highlighted the potential for lower gas prices if the conflict in Iran de-escalates, allowing for smoother oil shipments through the Strait of Hormuz. He noted that capital stock growth, which measures the resources used to produce goods, is currently between 5% and 8%, translating to a potential GDP growth boost of 1.5% to 2.5% from capital spending alone.