Treasury Secretary Scott Bessent projected U.S. economic growth of at least 3.5% for 2026, directly countering the Commerce Department's preliminary report showing real GDP expanded by only 1.4% in Q4 2025. Bessent dismissed the weak headline figure as "artificially low," blaming a 43-day federal government shutdown that shaved roughly a percentage point from output.

The underlying data reveals a more nuanced picture. Core private demand, measured by real final sales to private domestic purchasers, grew at a 2.4% pace. Business investment, particularly in intellectual property, surged 7.4%, fueled by AI-driven capex. This strength divides economists; Moody's Mark Zandi calls the economy "fragile" while Goldman's David Solomon sees a "quite good" 2026 setup.

Achieving 3.5% growth requires sustained momentum beyond a post-shutdown bounce. Constraints are significant: the GDP price index rose 3.7% annualized last quarter, and the Federal Reserve signals rates will stay restrictive at 3.5% to 3.75% until inflation cools further. Bessent's bullish call places a high bar on productivity gains and investment, with four tech hyperscalers planning nearly $650 billion in 2026 capex offering a potential, but not guaranteed, engine.