Treasury's Lavorgna is speaking to Reuters and says:
Expecting more growth in 2026 driven by measures emerging from the Trump tax act.
Already starting to see the capex cycle turn up, signaling improving investment momentum.
Full expensing rules for factories expected by year-end, supporting business investment and equipment spending.
Trump policies focused more on supply-side stimulus compared with Biden’s approach.
President takes affordability concerns seriously, highlighting cost-of-living as a policy priority.
Monetary policy has been to theo tight.
We won't need a 50 year mortgage if the Fed was lower rates.
2000 rebate of tariffs would require congressional approval, uncertain of its status
We may not need it if the growth backdrop is as strong as I think it will be.
It appears we moved close to 4% GDP growth in Q3.
Don't see any tariffs as being inflationary, inflation is rooted in services..
Seeing tariffs absorbed in margins.
Expecting on de minimis inflation effects from the tariffs next year.
AI is complementary to existing workforce.
We still need skilled trades despite AI
We need the Fed to help, but the economy will turn.
Trump is keeping us in suspense on timing of Fed appointment (although is he really?)
Of note...the helicopter money pronouncements (see post from yesterday) sound great, but they also can be politically motivated. The $2000 rebate to all American' under threshold sounds good taken from tariff money sound great but as Lavornia points out, it is not a done deal or may not even be possible. I don't get how on one hand, tariffs are reducing our deficits but then are being paid out to appease voters (inclusive of the farmers who have suffered). That has always been part of the calculus.
