Larry Kudlow projects economy growing close to 4%, predicts summer boom

Larry Kudlow is not being subtle about his economic outlook. The Fox Business host and former Trump National Economic Council director is calling the current US economy “absolutely booming,” pointing to a cluster of data points that, if they hold, would make this one of the strongest growth periods in recent memory.

The centerpiece of his argument: the Atlanta Fed’s GDPNow model, which is projecting real GDP growth of 4.3% for the second quarter of 2026. That’s not a government forecast or a Wall Street consensus estimate. It’s a real-time tracking model that updates as new economic data rolls in.

The numbers behind the optimism

Corporate profits have climbed 15% or better, according to his commentary. Manufacturing production is up 4%. And the standout: high-tech manufacturing has surged 23%, a number that reflects the reshoring boom and massive capital investment pouring into semiconductor and AI-related production facilities.

On the inflation side, Kudlow highlighted that core goods inflation sits at just 1.1% when you strip out food and energy. That’s a notable data point because it suggests the economy can grow at a fast clip without the kind of price pressure that would force the Federal Reserve to slam the brakes.

Kudlow noted that US household wealth is approaching $180 trillion, encompassing everything from home equity to retirement accounts to brokerage portfolios.

Supply-side economics takes a victory lap

Kudlow has framed the current expansion as a “Trumpian economy,” attributing the growth to the policy mix of deregulation and tax incentives that have characterized the current administration’s approach. He’s a lifelong supply-sider who believes that lower taxes, deregulation, and business-friendly policy create the conditions for economic expansion.

Kudlow is also drawing a contrast with persistent narratives of economic weakness, positioning himself firmly in the camp that says hard economic data should win out over consumer sentiment surveys.

What this means for investors

For equities, the 15% profit growth Kudlow cited supports a thesis of expanding corporate revenues and earnings. The 23% surge in high-tech manufacturing is particularly relevant for investors in the semiconductor and AI supply chain, where capacity expansion has been the dominant theme.

For bonds, strong growth combined with core goods inflation at 1.1% creates an unusual environment where the Fed may be able to stay patient despite 4%-plus GDP growth.

It is noteworthy that none of Kudlow’s discussions or reports make any mention of cryptocurrency or digital assets.

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