"Economic performance is better than expected!" U.S. Treasury Secretary Benson: Strong holiday shopping season, GDP growth expected to reach 3% at the end of the year!

US Treasury Secretary Benson has indicated that the performance of the holiday shopping season has been "very strong" so far and predicted that the US economy will end the year on a solid footing. He stated in an interview, "The economy is doing better than we expected. We have achieved 4% GDP growth for two quarters. Despite the government shutdown, we are still on track to end the year with a 3% actual GDP growth." According to data from the Bureau of Economic Analysis (BEA), the US Gross Domestic Product (GDP) contracted by 0.6% year-on-year in the first three months of 2025. The second quarter saw growth of 3.8%. BEA's preliminary estimate of third-quarter economic performance will be released on December 23. The latest estimate from the Atlanta Fed on December 5 shows a third-quarter annualized GDP growth rate of 3.5%. Consumer spending accounts for nearly 70% of the US GDP and is a key driver of the US economy. The "Black Friday" at the end of November and "Cyber Monday" earlier this month both saw strong sales performances. Data shows that US consumers spent $14.25 billion on "Cyber Monday", leading to a total online sales of $44.2 billion over Thanksgiving weekend, a 7.7% increase year-on-year. While the strong sales performance over Thanksgiving weekend highlights the resilience of the US economy, this data overlooks the lackluster growth in consumer purchasing power in a high inflation environment and the increasing economic disparities. Although overall spending has increased, much of the sales growth has been driven by price increases rather than an increase in the quantity of goods purchased, with shoppers buying fewer items per transaction. The consumer behavior of the affluent class and the low-income group is showing a "K-shaped economy", where inflation anxiety and price sensitivity are the core variables influencing market sentiment. Additionally, the University of Michigan's Consumer Confidence Index for December is at 53.3, up 4.5% from November but down 28% from the same period last year. Despite the impact of rising prices on consumers, US President Trump has refuted claims that the American people are facing economic difficulties. Trump stated at a cabinet meeting last Tuesday, "'Affordability' is a scam by the Democrats. 'Affordability' is a fraud by the Democrats." Recently, American voters have expressed dissatisfaction with Trump's handling of economic issues. According to a poll, about two-thirds of registered voters believe that the Trump administration has performed poorly in terms of the economy and cost of living. When asked about Trump's statements, Benson stated last Sunday that the government was addressing the inflation issues left behind by the Biden administration and believed that media reports were influencing how Americans view the economy. Benson said, "Americans don't realize how good their situation actually is. Democrats have created scarcity, whether in energy or excessive regulation, and now we see the affordability issues that stem from this. I believe that next year we will move towards prosperity." It is reported that Benson recently made an important statement at a White House cabinet meeting, predicting that the US economy will achieve a 4% growth target in 2026. This expected figure differs significantly from the latest forecast released by the Organization for Economic Cooperation and Development (OECD), which predicts that the US GDP will grow by 1.7% in 2026. Benson emphasized at the meeting that next year will be a year of real economy. He stated that the first quarter of 2026 will see a very substantial tax refund. At the same time, the US will benefit from "real wage growth" and "low-inflation growth". According to Benson's forecast, the US economy will return to a growth level of 4% in 2026. This judgment is based on a comprehensive consideration of multiple economic factors, and proactive fiscal policy will provide strong support for economic growth. Federal Reserve Chairman Powell's term will end in May next year. The policy orientation of the new Federal Reserve Chair will directly affect the realization of Benson's economic growth expectations, and the coordination of monetary policy and fiscal policy will be a key factor. The market is closely watching the final result of this important personnel appointment. Kevin Hassett, the Director of the White House National Economic Council and a loyal supporter of Trump, is currently the most likely candidate in the prediction markets to succeed Powell after his term ends in May. It is widely speculated that if Hassett is appointed as the Federal Reserve Chair, he may significantly cut interest rates to please Trump, and the decrease in interest rates may further boost US economic growth. It is worth mentioning that Gregory Peters, Co-Chief Investment Officer of the Fixed Income Division at global insurance asset management giant PGIM, previously noted that even if Hassett is approved to be the next Federal Reserve Chair, he may not be able to achieve the rapid rate cuts that Trump is hoping for. He stated that since the Federal Reserve's interest rate decisions are ultimately made by the committee, Hassett cannot fulfill this demand on his own.