Trump’s Disinflationary Boom: Joe Lavorgna on Growth, Jobs, and a Populist Tear

STEVE BANNON (HOST): I want to go now to Treasury to Joe Lavorgna. Joe, I got a couple of minutes on this side. Just tee me up and I’ll hold you through the break.

The numbers this morning, I liked them. I thought they’re pretty good. But it fits into the narrative that you and the Secretary have been talking about, about a disinflationary, disinflationary, disinflationary boom, sir. What do you got?

JOE LAVORGNA: Disinflationary boom. Steve, the last month when the data came out to market, investors were surprised that the numbers were softer than expected. And the argument was that it was temporary, that you’d see an acceleration or a payback, if you will, in December. That did not happen.

The core CPI, which strips out food and energy, for example, the three month rate of change remained at one six. There are a lot of positives in the report. We’re going to make significant further progress, which is going to take a little bit of time, so we counsel patience because we had a mess that we inherited.

But the point is, the numbers on the inflation side are trending powerfully in the right direction. And of course, the boom aspect you see in the GDP numbers, near 5% private sector GDP, the last two officially reported quarters.

The widely filed, the Fed has growth over 5% for the fourth quarter. That would take growth for the year, despite the weak year when Biden was in office, of over 3%. So when we talk about a disinflationary boom, we’re talking about surging GDP, rising incomes, and an inflation rate that starts to fall and doesn’t preoccupy people’s concerns.

STEVE BANNON (HOST): Joe Lavorgna, you’ve talked about this strategy for growth. I kept telling everybody, don’t lose it. And people came out back in those elections in November, said everything in 2016 is going to be about affordability. I said, no, it is not. Just take a deep breath. Don’t get sucked into the Democrats’ narrative.

There is a plan here. It is a sophisticated plan, and the plan has scale. In fact, we’re sitting here on tenterhooks right now, waiting for the Supreme Court to talk about President Trump changing all the commercial relationships throughout the world, and what we call trade, and through tariffs.

Okay, but the tariff aspect, the commercial aspect, the trade aspect, is one big piece coupled with the supply side tax cut to incentivize capital to pour back into this country, into high value, evaluated manufacturing jobs.

Hence why the President of the United States is on a plane this morning, going to go to Detroit, going to look at some factories. One of the gauges here is how many F 150s one can sell, right? President Trump’s going to see all that, and then give a major address.

A disinflationary boom is not just jargon. It is the concept here.

I want to go back and make sure, because I got Rob Bluey on next from the Daily Signal. They’ve written a brilliant piece about how we get to a balanced budget, because part of the problem we have here is still too much federal spending. One of the ways you get there is, wait for it folks, GDP growth, economic growth.

This is a growth strategy. Scott Bessent, as a contributor here on the show for years, sat as a contributor and said we have one last shot to have a supply side tax cut, which is driven on production and bringing manufacturing back. A part of that, the key to that, is growth. GDP growth, wage growth, job growth.

What you’re seeing now, and I want you to explain to the audience, because this is not a concept you heard during the Biden years, because everything was about this massive federal spending that got us into the whole of inflation and this huge debt.

The interest payments we have to make on the debt was all Biden, because the radical Democrats just believe in government. They don’t believe in private industry.

So tell us the difference. The Atlanta Fed are putting up numbers that are shocking how good they are about private market GDP growth. I just want to make sure the audience understands the difference, because this will tee up brother Rob Bluey and his strategy to balance the budget, sir.

JOE LAVORGNA: If you take GDP, gross domestic product, and you strip out the federal side, which to your point was booming on an unsustainable track over the previous four years, GDP in Q2 and Q3, President Trump’s first two full quarters in office, the economy grew almost 5%.

GDP, excluding the government sector, grew actually 4.8% annualized over those two quarters. Fast forward to the fourth quarter, where there was a government shutdown and people worried the economy would be depressed. The Atlanta Fed has GDP growth predicted at 5.1%.

But related to the President’s reindustrialization manufacturing policy and tariffs, the trade deficit shrunk to its lowest level in the last month’s reading since 2009, as imports plunged and exports went up.

So you’ve got the private sector, that means business investment, household consumer spending, in addition to exports, and a rejuvenation and revitalization of manufacturing that is driving growth faster.

And as we look to 2026, when the Secretary talks about a boom and the President talks about a golden era, we’re seeing it in these data figures, which are undisputably positive. And the next piece that will come will be good, high paying jobs.

That will be central to really restoring the economy from the sugar high, unsustainable government spending blowout that we’ve had over the previous administration.

STEVE BANNON (HOST): And of course, the President yesterday putting out executive orders talking about electricity, the whole thing with data centers. Because right now AI, the only thing that would hurt on the jobs part is artificial intelligence taking away some administrative, managerial, and coding jobs for folks 20 to 30 years old. That’s going to be an issue, but somehow President Trump and Bessent will figure it out and work around it.

Joe, where do people go? Go ahead, sir.

JOE LAVORGNA: Yeah, I was just going to say, you made an energy point. People did not believe gasoline prices could fall well under $3 a gallon. They’re around $2.75, $2.80. That’s a huge tax cut for businesses and consumers.

And the President’s initiatives on the utility side should also help. So it’s all good news. They can follow the Treasury Secretary at Sec Scott Bessent at U.S. Treasury, and then I can be followed at @Lavorgnanomics.

STEVE BANNON (HOST): Now, the President’s on a populist tear. He’s dealing with the mortgage issue. He’s dealing with the affordability of housing issue. He’s getting into the big banks about capping interest at 10%. He’s all over full spectrum energy dominance, particularly dealing with these data centers and making sure they can’t come back on the grid and torch folks.

This is President Trump on a populist tear right now for economics, and we love it. There’s even more to do, but we love what we’re seeing so far.

Joe, thank you so much. And thank you for putting the intellectual framework, the disinflationary boom, that you can see in the numbers right now. Appreciate you, sir.