Trump economist predicts 'massive' tax refunds, says families could save thousands
NEC director Kevin Hassett says the refund cycle could be the largest in U.S. history as wage gains outpace inflation; he is among contenders to lead the Fed.
A top contender to become President Donald Trump’s next Federal Reserve chair said in a Fox Business interview that Americans should expect a very large tax-refund season next year, with households receiving “massive refund checks” and higher take-home pay.
Kevin Hassett, director of the National Economic Council, told Fox Business’ Varney & Co. that the refund cycle could be “the biggest refund cycle ever in the history of America, and people are going to get massive refund checks.” He added that the refunds alone could amount to “a couple-thousand-dollar refund” per household, a claim that aligns with Trump’s broader prediction of a strong fiscal tailwind for families.
The remarks come as Trump has repeatedly touted the idea that the upcoming refund season will be exceptionally large. Hassett cited labor-market data, noting that wages for the typical worker rose about 3.7% in recent reports. If that wage growth persists against a roughly 1.6% core inflation rate, he argued that real wages would be growing in the neighborhood of 2% to 2.5%. “By our estimates right now, blue-collar workers have already seen an almost $2,000 raise this year after inflation,” Hassett said, underscoring the idea that wage gains could translate into higher household take-home pay alongside refunds.
Hassett stressed that the federal tax changes affecting last year’s filings might not be fully reflected in early tax forms, meaning the timing and size of refunds could hinge on how those changes show up in the tax code and in forms submitted by households this spring. He suggested that the timing of the refund cycle relates to reforms enacted earlier in the year and to how those reforms are captured in the annual filing process, echoing past critiques about the treatment of tax changes in the first year of their implementation.
The NEC director is on a short list of contenders to succeed Federal Reserve Chair Jerome Powell, who has faced criticism from Trump over policy at times and who supporters say has prioritized gradual rate moves to fight inflation. Hassett’s appearance on national television as a possible future Fed chair underscores the intertwining of tax policy, wage growth, and monetary policy in the administration’s economic storyline.
In the same interview, Hassett pushed back against a Fox News Poll that found 44% of Americans say they are falling behind financially and 74% view the economy as “not so good” or “bad.” He framed those numbers within the context of wage growth and tax policy, arguing that the combined effect of higher wages and expected refunds could improve household finances even as sentiment remained soft.
Analysts caution that the size and timing of refunds depend on a wide range of variables, including the shape of any further tax changes, the specifics of state filings, and how quickly households actually adjust to higher take-home pay. Still, Hassett’s remarks reflect a broader administration wager that tax policy and wage dynamics could provide a sizable near-term boost to consumer finances, even as policymakers weigh the trajectory of interest rates and the Fed’s mandate.
Market watchers and political strategists alike will be watching how those components unfold, particularly as the administration considers a candidate to lead the central bank. If Hassett or another administration ally takes the helm at the Fed, observers say the interaction between tax refunds, wage growth, and rate policy could shape consumer behavior and financial markets for months to come.
For now, the expectations for a record refund season contribute to a narrative in which household cash flow could improve sooner than many economists anticipated, even as broader sentiment remains unsettled. As the tax filing season approaches, households will be assessing how refunds and take-home pay translate into spending and saving choices in an economy that has shown resilience but continues to grapple with inflation, interest-rate dynamics, and geopolitical headwinds.
