Weekly Wisdom | The Coming Economic Boom
The Golden Age Begins
On Thursday, September 25th, the Commerce Department released the revised second-quarter GDP growth rate, which came in at 3.8%! This is the most significant quarterly GDP number in 2 years, and it came in ahead of most economists’ expectations. There is a good reason to be optimistic about the beginning of a substantial economic boom, which could start by the end of this year and continue throughout the rest of President Trump’s term.
Here are the reasons why:
The Big, Beautiful Bill will increase consumption and increase the nation’s savings rate due to the elimination of taxes on tips and overtime (within certain limitations). Furthermore, this massive bill also allows write-offs and tax credits for new factories, high-tech research and development, and new semiconductor plants. President Trump is promoting economic growth in both the blue-collar and white-collar segments of the economy.
On September 17th, the Federal Reserve voted to slash interest rates a quarter point due to a weakening labor market. Federal Reserve Governor Christopher Waller told CNBC on September 3rd that “over the next three or six months, we could see multiple cuts coming in.” Lower interest rates and a less restrictive monetary policy will help unfreeze the housing market and could spur additional lending overall.
As AI is increasingly implemented by more people and businesses each month, productivity gains are expected to accrue across the economy. Most business leaders and economists anticipate significant increases in productivity within the next one to three years.
Investments in data centers, a foundational aspect of AI, will continue to fuel GDP growth in the United States. The Magnificent Seven technology companies are expected to spend over $320 billion by the end of the year on AI and data center construction. Capital expenditure is expected to increase in 2026 from 2025 levels.
Capital flows to where it earns its best return. Fortunately for the United States, most other nations are lagging. In the second quarter, the European Union grew a measly .1%, Japan grew 2.2%, and the United Kingdom .3%. China, our main economic competitor, grew at a solid 5.2% in the second quarter, although this was lower than their first quarter GDP reading. With an excellent start-up environment and accommodating regulatory policy from the Trump Administration, capital is flowing into the United States.
The ability to retain our majority in Congress will largely be predicated on broad-based economic growth. President Trump and his cabinet have cut hundreds of regulations across various sectors while implementing both pro-business and pro-worker policies. The overall economic picture is optimistic because these previously mentioned policies will combine with the ongoing technological revolution to create a financial boom not seen in decades.
