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Feb 09, 2026
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LONG
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Hassett identifies a "productivity boom" driven by AI and tax policies, specifically highlighting Caterpillar (CAT) as a major beneficiary. He also defends Salesforce (CRM) against fears of AI displacement. * CAT: Trump's tax policies allow companies to fully "expense" capital equipment immediately. This incentivizes heavy machinery purchases. Combined with AI-driven efficiency, profits for industrial firms are expected to skyrocket. * CRM: Despite fears that AI agents will replace software platforms, Hassett argues that large incumbents hold the critical data and deep client relationships. Clients will not abandon trusted platforms for raw AI models immediately. Hassett cites 4% GDP growth projections and a 50-80% productivity increase for software engineers using AI tools. A "jobless recovery" where productivity skyrockets but labor demand falls, potentially causing social/economic friction. |
CNBC
Squawk Pod: Super Bowl ads & GLP-1 competitio...
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Feb 09, 2026
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LONG
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Caterpillar is highlighted as a top performer in the Dow, and Hassett views this as "100% consistent" with current economic fundamentals. Two forces are driving this: 1) Trump's tax policies allow companies to "expense" (immediately write off) capital equipment, creating high demand for heavy machinery. 2) AI integration is increasing operational efficiency and profit margins for industrial giants like Caterpillar. Hassett notes "big demand for Caterpillar stuff" and cites the stock as the biggest outperformer in the Dow recently. A reversal in tax policy or a slowdown in construction/industrial spending. |
CNBC
Watch CNBC's full interview with White House ...
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Feb 09, 2026
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LONG
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Hassett pushes back against the market fear that big software companies (like Salesforce) will be "cannibalized" by raw AI chatbots. While AI is powerful, large enterprises rely on deep, trusted relationships and historical data held by incumbents. Clients will not abandon established platforms for a generic chatbot immediately because the "trust moat" is too wide. Hassett cites conversations with Silicon Valley insiders noting that while productivity is up, the client base is sticky due to "relationships... and data these firms have built over time." Rapid advancement of AI agents that can autonomously replicate complex enterprise software functions. |
CNBC
Watch CNBC's full interview with White House ...
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Feb 09, 2026
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LONG
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The economy is in a "productivity boom" similar to the 1990s. AI allows companies to maintain or increase output with fewer employees (lower costs). When productivity rises, profit margins expand. Since profits are the "mother's milk of stocks," this supports a continued rally in equity valuations. Software engineer productivity has increased 50-80% in the last year; GDP growth is tracking at 3-4%. If the labor market contracts too sharply (mass unemployment due to AI) before new roles are created, consumer spending could collapse. |
CNBC
Watch CNBC's full interview with White House ...
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Feb 09, 2026
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WATCH
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Upcoming jobs data might look weak (low payroll additions), but investors should not panic or assume a recession. A "break-even" jobs number is now lower than before because 1) AI allows companies to grow GDP without adding headcount, and 2) the labor supply is shrinking due to stricter immigration/deportation policies. GDP is growing at 4% despite "not great" jobs news and higher layoffs (Challenger, Gray & Christmas data). Misinterpreting low job growth as a recession signal could lead to premature selling or policy errors. |
CNBC
Watch CNBC's full interview with White House ...
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