Hassett forecasts 4% growth, says AI boom and tax incentives driving US investment surge

• Hassett attributes the growth surge to AI-driven productivity gains translating into corporate earnings growth and increased capital spending
• Tax incentives restoring full expensing and bonus depreciation for factory construction and equipment are creating a 'race unlike anything we've ever seen to create jobs in America'
• Major multinational corporations are pouring billions into U.S.-based semiconductor, AI, and advanced manufacturing projects, making the U.S. 'the hot place to be right now'

Summary: Hassett Forecasts 4% Growth Driven by AI and Tax Incentives

White House National Economic Council Director Kevin Hassett projects the U.S. economy will achieve 4% growth for the remainder of the year, driven by a combination of artificial intelligence investment, tax incentives, and surging domestic manufacturing.

Key Drivers

Hassett attributes the optimistic outlook to an "AI productivity boom" translating into stronger corporate earnings and increased capital spending. Major multinational corporations, including Novartis and Taiwan Semiconductor Manufacturing Company (TSMC), are directing billions toward U.S.-based expansion projects in semiconductors and advanced manufacturing.

Tax Policy Impact

The administration's push to restore full expensing and bonus depreciation for factory construction and equipment has triggered accelerated investment before incentives expire. According to Hassett, this has created "a race unlike anything we've ever seen to create jobs in America right now."

Sectors Affected

The investment surge spans semiconductors, AI infrastructure, and advanced manufacturing, with the U.S. positioning itself as "the hot place to be" for corporate expansion. Hassett emphasized that recent import data reflects long-term investment in manufacturing equipment rather than weakening domestic demand.

Market Implications

The forecast suggests sustained economic momentum through year-end, potentially supporting equity markets and corporate earnings. The combination of productivity gains from AI adoption and tax-driven capital expenditure could maintain growth above historical averages, benefiting technology, manufacturing, and construction sectors. Hassett expressed high confidence in the 4% growth target, stating he would personally bet on achieving it.