'MASSIVE REFUND CHECKS': Kevin Hassett teases 'biggest' refund cycle in US history

Yeah, it was just an absolute blockbuster report. You know, before the numbers come out, we look at the forecast from everybody we can find on Bloomberg. We've looked at 61 forecasts and this number came in better than every single one of them. Not a single economist surveyed by Bloomberg got it right. And the thing that I like to look at, Stu, and you've heard me say this for years and years since I've been on your show, is that the near-term trajectory is what's really important. And if you look at over the last three months and then annualize it, core inflation is only 1.6% now. And so basically 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 going to put downward pressure on prices and that's what we're seeing. So we've got high growth and we've got core inflation running at 1.6% if you look at the last quarter. And I think that's about where we should be. 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. So, I think that I'm not saying we're going to declare victory yet on the price problem, but this is just an astonishingly good CPI report.

Yep.

Well, I mean, right now, if you look at what's happening with the lower inflation and the higher wages, you saw in the jobs report that the latest wage number was 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 2.5%. 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. I think that what happens in the end, and this is what happened in the first term, is that people will see it in their wallets. One of the things that I think is really interesting about what the president said last night, which is a very important point, is that 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. And so we are going to see the biggest refund cycle ever in the history of America. And people are going to get massive refund checks. So for the typical person who's a tip worker or gets overtime pay, we're expecting just that part of it alone to be worth a couple thousand dollar refund. And we're going to definitely have a big PR campaign at the beginning of the year urging people to file early so they can get the money that they're owed from taxes this year.

Oh, I didn't know.

Yeah. I'll just say people are going to get big tax refunds next year and the numbers are striking. He's correct about that.