A leading contender to become President Trump’s next Federal Reserve chair said the administration expects larger tax refunds and higher take-home pay next year, as many Americans continue to express concerns about affordability.
"We are going to see the biggest refund cycle ever in the history of America, and people are going to get massive refund checks," National Economic Council Director Kevin Hassett said in an interview on FOX Business' "Varney & Co." on Thursday.
"We're expecting just that part of it alone to be worth a couple-thousand-dollar refund … the numbers are striking."
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During his Wednesday evening address, President Trump said the administration expects "the largest tax refund season of all time" next spring and claimed many families would save between $11,000 and $20,000 annually.
Hassett backed up this claim and pushed back against sentiment from a recent Fox News Poll, which found that 44% of those surveyed say they are falling behind financially, and 74% view the economy as "not so good" or "bad."
"You saw in the jobs report that ... wages for the typical worker were up 3.7%. So if you're running 3.7% wage increases at 1.6% core inflation, then real wages are growing at a rate of about 2 [to] 2.5%. By our estimates right now, blue-collar workers have already seen an almost $2,000 raise this year after inflation, because wages are growing so much faster than prices," Hassett explained.
"I think that what happens in the end — and this is what happened in the first [Trump] term — is that people will see it in their wallets," he continued. "We didn't pass the ‘Big, Beautiful Bill’ until the middle of the summer. And so a lot of the tax changes, which affect last year, weren't in any tax forms that people filled out at the beginning of the year."
Overall, Hassett struck a bullish tone on the economy and pointed to what he described as a "blockbuster" November inflation report, with figures coming in cooler than economists expected.
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"What's happened is, as we predicted throughout this term, that if you really put the pedal to the metal on aggregate supply, then that's gonna put downward pressure on prices," he said.
"And don't forget, that's where we were last time in President Trump's first term. We were growing in the 3% range, and we had inflation in the 1% range. And it looks like that's where we are again."
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