US GDP growth expected to reach 3.5 in 3Q: Kevin Hassett

Kevin Hassett, chairman of the White House Council of Economic Advisers, told FOX Business he expects 3.5 percent U.S. economic growth for the third quarter

“I would say three and a half is looking like a pretty comfortable number right now, but I would hope it would come in above that,” Hassett said during an exclusive interview on “Countdown to the Closing Bell” on Tuesday.

Hassett’s prediction is a lot closer to the Atlanta Federal Reserve’s GDPNow forecast of third-quarter gross domestic product (GDP) growing at an annualized rate of 4.1 percent, whereas the New York Federal Reserve Bank sees it at a lower rate of 1.98 percent.

“I think that the Atlanta Fed number is closer to what our number is than the New York Fed number because there’s all this inventory rebuilding that has to happen in the quarter,” he said.

The Trump administration’s pro-business policies have driven momentum in the economy, including low unemployment and a surge in production output for the second half, according to Hassett.

“We’ve made America a great place to locate businesses again,” he said. “The big story of the second half is going to be all those factories we built in the first half are going to produce output and that’s going to make output go even higher.”

President Trump’s efforts to improve U.S. trade deals by imposing tariffs on steel and aluminum imports have elevated trade tensions among such U.S. allies as Canada, Mexico and the European Union.

Hassett acknowledged that uncertainty over whether the Trump administration could deliver on its trade promises weighed on markets in the first half of the year, adding that recent progress in those talks should contribute to a strong conclusion to 2018.

“Now we have delivered with Mexico, and I think we’re going to deliver over the second half of the year. It’s another reason I think markets should be optimistic that this, you know, [4 percent] growth can continue,” he said.