White House economic adviser Larry Kudlow rejects criticism that the US economy is only growing because of a “sugar high” from The Trump Administration’s tax reform.
He predicted that President Trump’s “pro-growth policies on taxes and regulation” will continue to stoke growth far into the future.
Some economists contended that the economy is losing steam as the stimulus from last year’s $1.5-T tax cut package fades.
Activity is also being crimped by a trade dispute between the United States and China as well as by last year’s surge in USD and softening global economic growth, which are hurting exports.
“If you are going to play that game, the sugar high one year, let’s just get the facts right,” the veteran financial guru and former Ronald Reagan adviser recently told CSPAN.
“It is not 1 year, it is a whole bunch of years going well out to to 2024, 2025 and so on. Why should it end?” asked Mr. Kudlow
“We will have a softQ-1, we always do” when there are harsh seasonal weather factors, he said.
“I think you will see it picked up very nicely in Q’s 2, 3 and 4. We are already seeing a nice move up in the stock market and I am very pleased the Fed is on hold” for any rate hikes, Mr. Kudlow said.
“Markets are giving you a signal. The economy is giving you a signal,” of expectations of sustained higher growth.
“Money is coming in from all over the world. The USD is strong because we are working and they are not,” he said of rival global economies. “And everyone wants to invest in the hottest economy because of the change in our laws.”
US manufacturing output fell for a 2nd month running in February and factory activity in New York state hit nearly a 2-year low this month in data released Friday, offering further evidence of the slowdown in economic growth early in Q-1.
The reports Friday extended the streak of weak data and underscored the Fed’s “patient” stance towards further interest rate increases this year. Fed officials are scheduled to meet next Tuesday and Wednesday to assess the economy and deliberate on the future course of monetary policy.
The Fed said manufacturing production dropped 0.4% last month, held down by declines in the output of motor vehicles, machinery and furniture. Data for January was revised up to show output at factories falling 0.5% instead of 0.9% as previously reported.