How are you?
Hello?
I'm doing well.
Hello, guys.
Can you answer a few questions? Order number two of Mr. Hassett, uh, please, uh, your action number is at 3 percent.
Very quick because I know it's hot.
Yeah, it's really one of the best, uh, GDP, uh, announcements or releases that you can imagine. Because there's blockbuster growth way above expectation. And there's also a real, real, almost collapse in inflation. It went down by about a percent and a half, all the way down to 2.1 percent, which is the Fed's target.
Yeah, I just have a couple seconds. It's a little warm today.
And so to have high growth with low inflation and also high income growth, personal income growth was 3 percent. That's just like about a sweet spot for a GDP release. And I will add that all of this happened while, uh, $127 billion in tariffs was raised, uh, which is clearly not harming the American consumer.
Kevin, if prices do end up going up as a result of these tariffs, will the president consider changing course?
And uh, we've been downsizing government in order to be more fiscally responsible. Uh, 70,000 federal jobs, uh, have been reduced. And 5 percent. There was a 5 percent reduction in federal government spending, while all this was going on.
The president speaking -- oh, I'm sorry. We've been following the data closely. The import prices have dropped dramatically since the tariffs started, which is a sign that, as President Trump suggested, that foreign countries and foreign companies are going to bear a lot of the tariff. And we're highly confident that, if you looked at the GDP release today, that real wages grew at 3 percent -- a 3 percent rate is a strikingly high rate.
[Crosstalk]
And that means that people have more money in their pockets than the price increases that they're seeing and that's a good sign. I think that that's what we should expect to see in the future as well.
How much -- The billions coming in and the experience it's brought.
Most of the tariffs haven't been put into place yet, right?
Oh, and -- and I'll just say that -- that I'll go across and -- and you guys won't have to shout over each other, OK? I'll try to go until I get too hot. [Laughter]
We have $127 billion in revenue that we raised already, and inflation is down. As you saw, the GDP release today is CPI inflation -- or PCE inflation is at 2.1 percent.
Well, it's 100 degrees out here.
How did the issues South Korea and the United States, as they're talking today. Do you think they conclude this time, or you just go through to August 1st, remain the 25 percent?
Sure.
There's a lot of movement with South Korea. I know that -- Robin, I'm meeting tomorrow with the South Koreans. So, we'll have more tomorrow the next day to talk about that.
Uh, one more, the uh, the India, you know, the President Trump announced it today, the new tariffs kicking in, in India, uh, explain that, please.
Do you expect the fed chair to lower rates today, are you expecting anything from --
Sure. Right, well, India has had a market that's been pretty much closed to American products. And we've been wide open to theirs. And I think President Trump is frustrated with the progress we've made with India, but feels that a 25 percent tariff will address the and -- and remedy the situation in a way that's good for the American people.
We respect the independence of the fed. We'll look forward to seeing what their decision is today.
Yes, please?
Has the president indicated to you at any point he may name a potential successor to Powell? Has he indicated that?
What are you expecting for GDP for the third and fourth quarters, so you can look ahead?
He's asked Treasury Secretary Bessent to lead a thorough process to go through all the best candidates and then present the president with options.
Oh, thanks. You know, things go up and down. But one of the things -- when I said that this is a real beauty contest, winner of a GDP release, one of the things I look for is something in the release that gives me cause for optimism, why should be even better next time. And there's a real big one of those in this release.
And the New York Times review -- This morning Chuck Schumer -- he said that the GDP growth numbers are a mirage, he said some dark numbers lurk below the surface. He was pointing to business investment numbers that came out. Can you respond to that?
Which is because of the Big Beautiful Bill that people held back their construction awaiting to see like the expensing for factories and so on. And so one of the negatives was that there was a decline in that kind of construction and also multi-family construction, which we expect is fully going to rebound now that the bill is passed.
Well, I'm actually impressed that Mr. Schumer would be looking through the nuances of the numbers. If he had been doing that in the previous administration, he might have noticed that almost all of the growth in jobs was for government employees, and almost all of the growth of GDP was for government spending.
And so I think that what -- when you're thinking about what's going to happen next quarter, you're talking about 3 percent momentum despite the fact that we had the negative drag from people holding off spending, waiting to see if the bill passed. And so I'm looking more like a 4 percent number for the second half of the year.
Government spending dropped enormously. We've reduced government employment by about 70,000 people and we've got 3 percent growth. The one bit of news in today's release that was a little bit different than all the other top lines was that there was a decline in capital formation. But that was for the manufacturing facilities that are going to be able to be expensed because we passed the Big, Beautiful Bill.
[Crosstalk]
And so, our expectation is that what happened is that people held up on construction because they wanted to make sure they could expense it after the bill was passed. So, thank you. I've got to run now. So, thank you, guys. That's it, I'm sorry.
Two on tariffs, in particular.
Thank you, Kevin.
Uh-huh.
One on the president's announcement that India will also face an additional charge for its purchase of Russian oil. How high is that going to go? And for how long will it last?
Uh, the president and Jamieson Greer, will have more information for you -- that -- shortly -- shortly.
And -- moving forward, now that the -- the tariffs will be fully implemented, I suppose on Friday, what should consumers expect? Why won't that impact the -- the price that they pay for an awful lot of products that come into this country?
Well, what we've seen is that the price of imported goods has dropped enormously because the people who are selling stuff into the US don't want to lose their market share. And so, so far, the price of imported goods is actually declining. There's deflation for imported goods. And so in the fullness of time, I think that shows that one of the reasons why we've had, uh, I guess trade deficits that went on forever is that we have very inelastic supply and people who are going to cut their prices to maintain market share.
So as we head toward August 1st, there is, of course, some uncertainty about the tariffs. We haven't seen the paper that you alluded to. Uh, there are folks, M. Waters, that it's only going to concern -- they're concerned about what happens to product on the water and that that will affect, uh, kind of GDP and some of the economic forecasts.
How are you thinking about that?
You would have to talk through USTR with like what's going on with the stuff on the water. Thanks.
Um on the GDP --
I'm going to keep going this way and then I'll come back.
OK. [Laughter]
Yeah, uh, go ahead.
[Inaudible] with the, uh, hang ups that are -- that seems to be frustration very specific.
No, I can't, uh, give you more information on the inside scoop about that.
The president said last week on Friday that trade deals with Canada stalled. Is that still the case? Or any update there?
I think that there's still hope for progress. Uh, and uh, if the progress isn't what the president wants, then, you know, the deadline will kick in, in August.
How did you settle on a 25 percent rate for India? And what's that going to mean for a country like India that exports foreign goods to the US that there's any other goods?
Right, well, I think that what's going to happen is that India is going to cut their prices to the US in order to maintain their market share. That's what everybody else has been doing. And then they might reconsider their practices, which have led to this higher rate. And over time, I would guess that Indian firms will be onshoring production in the US. And Indians might even open their markets more to us so that we reconsider a future trade deal.
So over here.
Can you kind of give us a glimpse into what this rush is like before this deadline, given in all the meetings that are happening, all the talks that are happening? And then also just a quick update on markets in China right now.
Yeah, well, you know, the President's going to be briefed today on the negotiations that Jamison Greer and Secretary Bessent had in Stockholm. And again, the readouts from those meetings were that they were very collegial, that it feels like folks are even becoming friends a little bit that are, you know, sitting around the table.
And so I think that the -- the ground is set for, you know, very positive developments. But in the end, the president drives hard bargains. He's going to look at what Secretary Bessent especially has produced. And he might have -- he probably will have some changes that he wants to make before we announce any kind of agreement.
So --
OK, OK, then I'll go back this way. Yeah.
[Inaudible]
I'm going to go around this way. Yeah? Yeah, I go here, here and here. And then I'm going to go in before I die. [Laughter]
All right. Um, the GDP report is obviously not the only report that we're expecting this week.
Um-hum.
What is the White House expecting from the PCE price index as well as Friday's jobs report?
I think that we're expecting the number that you saw today, the GDP release is about the path of inflation right now. And we're very bullish on the jobs report because we think that after the Big Beautiful Bill has passed, uh, that already there was a lot of positive momentum. And uh, we think that, yeah, we think that July is going to be a really strong number.
Given the extra tariff money, the billions coming into American coffers right now, do you believe that should be used for this proposed rebate that's floating around out there, that idea, or whittle down the debt or something else?
Well, the beauty is that there are trillions and trillions of dollars of revenue coming in, which can help us balance the budget and reduce the tax burden on American people. And I -- I remind you that when real income is growing at three percent, that means that whatever you think the tariff effect on prices is that real incomes went up by three percent more than that in the last quarter.
And so President Trump's policies are definitely working. I had a last question over here. OK.
Thank you. Alana Austin with Newsmax. I -- I wanted to ask a little bit more about paying down the debt. And is there any frustration with Congress? There was that rescissions package that just was approved, the One Big, Beautiful Bill, but do you want to see the spending go down further? And could that further help grow and escalate?
Yeah, for sure. Uh, Russell Vought, who's our OMB director, has lined up, you know, way more than $100 billion in Rescissions. And so I think that Congress should expect rescission packages coming, uh, rapid fire, uh, in the fall. So thank you very much, guys. I'm glad that I got to meet with you.