{"id":56854,"date":"2025-12-03T12:38:32","date_gmt":"2025-12-03T16:38:32","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/treasury-official-lavorgna-outlines-robust-economic-outlook-calls-for-fed-easing-amidst-tariff-discussions\/56854\/"},"modified":"2025-12-03T12:38:32","modified_gmt":"2025-12-03T16:38:32","slug":"treasury-official-lavorgna-outlines-robust-economic-outlook-calls-for-fed-easing-amidst-tariff-discussions","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/treasury-official-lavorgna-outlines-robust-economic-outlook-calls-for-fed-easing-amidst-tariff-discussions\/56854\/","title":{"rendered":"Treasury Official Lavorgna Outlines Robust Economic Outlook, Calls for Fed Easing Amidst Tariff Discussions"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li>Treasury official Lavorgna projects strong <strong>Q3 GDP growth near 4%<\/strong> and anticipates further economic expansion into <strong>2026<\/strong>, driven by the <strong>Trump Tax Act<\/strong> and a turning capital expenditure cycle.<\/li>\n<li>Lavorgna advocates for the <strong>Federal Reserve<\/strong> to ease its <strong>monetary policy<\/strong>, stating it has been &quot;too tight&quot; and is needed to support broad-based economic growth.<\/li>\n<li>He dismisses <strong>tariffs<\/strong> as a primary driver of <strong>inflation<\/strong>, noting they are being absorbed in margins and that inflation is rooted in services, with only &quot;de minimis&quot; effects expected next year.<\/li>\n<li><strong>Artificial intelligence (AI)<\/strong> is viewed as complementary to the existing workforce, with a continued and growing need for <strong>skilled trades<\/strong> to build and maintain the necessary infrastructure.<\/li>\n<li>Major <strong>Chinese banks<\/strong> are proactively <strong>cutting high-yield deposit products<\/strong> to alleviate margin pressure, a move signaling broader efforts to support a slowing economy.<\/li>\n<\/ul>\n<p>Treasury Counselor Joseph Lavorgna presented an optimistic outlook for the U.S. economy, projecting <strong>third-quarter GDP growth close to 4%<\/strong> and anticipating continued expansion into <strong>2026<\/strong>. This growth, he stated, is expected to emerge from the <strong>Trump Tax Act<\/strong>, with the capital expenditure (capex) cycle already showing signs of turning up. Lavorgna also highlighted that full expensing rules for factories are expected by year-end, further supporting business investment.<\/p>\n<p>Despite the positive economic forecast, Lavorgna emphasized that <strong>monetary policy has been &quot;too tight&quot;<\/strong> and called for the <strong>Federal Reserve<\/strong> to provide assistance by lowering rates. He suggested that a 50-year mortgage would not be necessary if the Fed were to ease its policy. The Treasury official also noted that President Trump is keeping markets &quot;in suspense&quot; regarding the timing of a new Fed appointment.<\/p>\n<p>On the topic of <strong>tariffs<\/strong>, Lavorgna asserted that they are <em>not inflationary<\/em>, with inflation primarily rooted in services. He indicated that tariffs are being absorbed in corporate margins, and he expects only &quot;de minimis&quot; inflationary effects from them next year. He also mentioned that a potential <strong>$2,000 rebate of tariffs<\/strong> would require Congressional approval, and its status remains uncertain, possibly unnecessary if economic growth proves as strong as he predicts.<\/p>\n<p>Addressing technological advancements, Lavorgna stated that <strong>AI is complementary to the existing workforce<\/strong>, underscoring the ongoing need for <strong>skilled trades<\/strong>. This perspective aligns with broader industry discussions about the physical infrastructure requirements of AI. In related news, <strong>Global AI<\/strong> and <strong>HUMAIN<\/strong> announced a partnership to accelerate sovereign AI through large-scale <strong>Nvidia<\/strong>-powered (<a href=\"\/stock\/NVDA\">NVDA<\/a>) AI centers, reinforcing the demand for advanced computing infrastructure.<\/p>\n<p>In other significant corporate developments, <strong>Ford<\/strong> CEO Jim Farley is scheduled to meet with President Trump and Transportation Secretary Duffy today. Meanwhile, <strong>Glencore<\/strong> (<a href=\"\/stock\/GLEN\">GLEN<\/a>) CEO stated that the company would not be a junior party if <strong>Collahuasi<\/strong> and <strong>QB2<\/strong> copper mines were to merge, clarifying that they are not in active talks with <strong>Anglo American PLC<\/strong> (<a href=\"\/stock\/AAL\">AAL<\/a>) for a joint venture.<\/p>\n<p>Looking internationally, major <strong>Chinese banks<\/strong> have begun <strong>cutting high-yield deposit products<\/strong> to ease margin pressure, a move reported by Reuters. This action by banks, including Industrial and Commercial Bank of China (ICBC) and Agricultural Bank of China (AgBank), reflects efforts to reduce costs and support a slowing economy by creating room for lower lending rates. Geopolitically, the Prime Minister of Lebanon announced discussions with members of the UN Security Council this week regarding alternatives to <strong>UNIFIL<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Treasury official Lavorgna projects strong Q3 GDP growth near 4% and anticipates further economic expansion into 2026, driven 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