“The economic performance was better than expected”! US Treasury Secretary Bezent: The holiday shopping season is strong, and the GDP growth rate will end at 3%!

The Zhitong Finance App learned that US Treasury Secretary Bessent said that the holiday shopping season has performed “very strong” so far, and predicts that the US economy will end this year on a solid foundation. In an interview, he said, “The economic performance was better than we expected. We have achieved 4% GDP growth in two quarters. Despite the government shutdown, we will end the year with 3% real GDP growth.”

According to data from the US Bureau of Economic Analysis (BEA), the US gross domestic product (GDP) contracted 0.6% year-on-year in the first three months of 2025. The second quarter saw an increase of 3.8%. BEA's preliminary estimate of economic performance for the third quarter will be announced on December 23. The Atlanta Federal Reserve's latest estimate on December 5 shows that the annualized GDP growth rate for the third quarter was 3.5%.

Consumer spending accounts for nearly 70% of US GDP and is an important driver of the US economy. “Black Friday” at the end of November and “Cyber Monday” earlier this month both achieved impressive sales performance. According to the data, US consumers spent 14.25 billion US dollars on “Cyber Monday”, driving total online sales over Thanksgiving weekend to 44.2 billion US dollars, an increase of 7.7% over the previous year.

Although sales performance over the Thanksgiving weekend highlights the resilience of the US economy, this data masks the reality of weak real consumer purchasing power growth and growing economic polarization in an environment of high inflation. Despite an increase in overall spending, the increase in sales was largely driven by rising commodity prices rather than increased sales volume, and shoppers bought fewer items per transaction. The consumption behavior of the wealthy and low-income groups showed a “K-type economy,” and inflation anxiety and price sensitivity became the core variables dominating market sentiment. Furthermore, the University of Michigan's consumer confidence index for December was 53.3, up 4.5% from November, but down 28% from the same period last year.

Although rising prices continue to affect consumers, US President Trump has refuted claims that Americans are facing economic difficulties. Trump said at a cabinet meeting last Tuesday: “The word 'affordability' is a scam by the Democratic Party. 'Affordability' is the Democratic Party's method of fraud.”

Recently, American voters have expressed dissatisfaction with Trump's handling of economic issues. According to a poll, about two-thirds of registered voters think the Trump administration is underperforming in terms of the economy and cost of living.

When asked about Trump's remarks, Bessent said on Sunday that the administration is dealing with the inflation issues left over from the Biden administration and believes that media reports have influenced Americans' views on the economy. Bessent said, “Americans don't know how good their situation actually is. Democrats created scarcity, both in terms of energy and excessive regulation, and that's where the affordability issues we see now come from. I think next year we will be on our way to prosperity.”

According to reports, Bezent recently made an important statement at the White House cabinet meeting, predicting that the US economy will achieve the 4% growth target in 2026. There is a significant difference between this expected figure and the latest forecast previously released by the Organisation for Economic Cooperation and Development. The OECD predicts that US GDP will grow by 1.7% in 2026.

Besant emphasized during the conference that next year will be the year of the real economy. He said there will be a very impressive amount of tax rebates in the first quarter of 2026. At the same time, the US will enjoy the double benefits of “real wage growth” and “low inflationary growth.” According to Bezent's forecast, the US economy will return to 4% growth in 2026. This judgment is based on a comprehensive consideration of multiple economic factors, and the positive effects of fiscal policy will provide strong support for economic growth.

Federal Reserve Chairman Powell's term ends in May next year. The policy direction of the new Federal Reserve Chairman will directly affect the fulfillment of Bezent's economic growth expectations, and coordination between monetary policy and fiscal policy will be a key factor.

The market is closely watching the final outcome of this important appointment. Kevin Hassett, director of the White House National Economic Council and a loyal supporter of Trump, is currently the most likely candidate to replace Powell after Powell's term ends in May according to current betting market predictions. Outsiders generally speculate that after being appointed Chairman of the Federal Reserve, Hassett may cut interest rates drastically to please Trump, and that falling interest rates may help the US economy grow.

It is worth mentioning that Gregory Peters, co-chief investment officer of the fixed income division of global insurance asset management giant PGIM, pointed out earlier that even if Hassett is approved as the next chairman of the Federal Reserve, he may not be able to achieve the rapid pace of interest rate cuts expected by Trump. He said that since the Federal Reserve's interest rate decision is ultimately decided by the committee, Hassett cannot fulfill this demand on his own.