“The first quarter will be squealing in a positive category,” said Kevin Hassett, director of the National Economic Council.
Stocks fell sharply on Monday in part in response to the growing trade war caused by the Trump administration, but Hassett said he was not worried about the recession.
“[I’d] Joe should be very careful about the conversation about the recession given that there were two negative quarters that were recession under Biden and that wasn't a recession,” Hassett told CNBC's Joe Körnen on “Scoe Box.”
“What happens is that the first quarter will squeal into a positive category, and if everyone sees the reality of tax cuts, the second quarter will take off,” he added.
By Monday afternoon, the Dow Jones industrial average had fallen above 900 points, down 2.1%, while the Nasdaq Composite had fallen by 4.2%.
Stocks have been steadily declining since the beginning of the month, with overwhelming economic data and the Topsitterby tariff announcement via the Trump administration.
“Indeed, there is some uncertainty about exactly how trade policy works,” Hassett admitted Monday.
Last week on Fox Business's “Varney & Co.” Hassett said the US is “not heading towards a recession.”
He also said, “The tariffs placed alongside Canada and Mexico are there because we are fighting the war on drugs.”
Republican lawmakers have given the public signal that they are worried about how Trump's trade policy will affect the economy.
“Canadian tariffs will undoubtedly have a detrimental effect on Maine's economy and especially the border community,” Sen. Susan Collins (R Maine) said earlier. “For example, there's a major paper mill in northern Maine, on the border where we got pulp from Canada.”
