Introduction
Thank you. To begin, I’d like to express my appreciation to Minneapolis Federal Reserve President and CEO Neel Kashkari and members of the Economic Club for hosting us today.
It’s good to be in Minnesota again. They call it the North Star State for a reason. For decades, Minnesota led the Midwest as a hub for culture, business, and innovation. But in recent years, the leadership in Minnesota has knocked this great state and its people off course.
Failed experiments with big government, overregulation, and the second-highest corporate tax rate in the country have hurt job creators like you, leading to net outbound migration. But it doesn’t have to be this way. President Trump’s hope, and ultimately his invitation, is that Minnesota becomes the North Star State again. That’s why I am here today.
The same challenges that have beleaguered you have beleaguered many of your fellow Americans. These challenges include a glaring absence of political leadership from the previous administration, the damaging impacts of illegal immigration, rampant fraud, and the unchecked growth of government power.
President Trump inherited these very problems when he took office last January—and he has since fixed them one by one. In just one short year, President Trump has delivered a historic economic turnaround to put our country back on the path to prosperity.
In 2025, the President laid the foundation for powerful economic growth with: the historic passage of the One Big Beautiful Bill, which is actually the Working Families Tax Cut Act; trade deals that rewrote decades of global misalignment; and an ambitious deregulation agenda that empowered American entrepreneurs and businesses. Now, in 2026, we will reap the rewards of President Trump’s America First agenda.
Looking Back: The Biden Economy
President Trump’s economic turnaround is especially impressive given the severity of the situation he inherited from his predecessor. Minnesotans are acutely aware that the Biden Administration made life impossibly expensive through a toxic mix of what I call the three I’s: immigration, interest rates, and inflation. Hardworking families in this great state and across the country experienced the burden of Biden’s America Last economic policies, suffering from higher rents, higher prices, higher borrowing costs, suppressed wages, and elevated crime.
President Trump led a 12-month transformation of our economy, which delivered roughly 4% GDP growth in his first two full quarters in office and nearly 3% GDP growth in the fourth quarter, even amid a Democrat-led government shutdown. This growth is just a harbinger of what’s to come.
Looking Ahead: The Trump Economy
Through the three I’s of immigration, interest rates, and inflation, President Biden inflicted tremendous harm on our economy. But President Trump is creating prosperity and long-term opportunity for all Americans through three I’s of his own: investment, innovation, and income.
Investment
First, investment.
Biden damaged our country’s investment environment through weak trade policies, heavy taxes, and burdensome regulations that made it more attractive for companies to do business offshore. Thankfully, President Trump has fixed that.
When President Trump took office last January, he promised to rebalance global trade to the benefit of American workers and companies, including the many manufacturers and companies based here in Minnesota. And he has delivered on that promise in every way.
The President’s strategic use of tariffs has encouraged corporations, both at home and abroad, to invest directly in the United States. His message is simple: Hire your workers here. Build your factories here. Make your products here. And business leaders are answering the call.
The upshot of President Trump’s trade agenda is trillions of dollars in new investment across a broad cross-section of industries—from automotive manufacturing and semiconductors to tech and pharmaceuticals. This includes multibillion-dollar investment agreements from companies with large footprints right here in Minnesota.
Amazon, for example, invested $120 billion in the last fiscal year. And Minnesota-based companies like Medtronic, 3M, and General Mills have collectively invested over $3.4 billion in the last fiscal year. Investments like these translate to more jobs and more opportunity for workers in Minnesota and across the country.
Keeping US agriculture on top is critical to the state’s farmers and great Minnesota companies like Cargill, which is the largest private employer in the nation. That’s why the President has also leveraged trade to improve the position of American producers in the global commercial landscape. In every negotiation, the President without fail drives home two messages to our trade partners: first, open your markets to US agriculture; second, increase your agricultural purchases. That’s how he scored a victory for Minnesota soybean farmers when China agreed to reopen its markets to US agricultural exports.
Under this framework, China will purchase at least 25 million metric tons of soybeans annually from the United States for the next three years. To add to the good news, the high probability of an emerging La Niña weather pattern in the Southern Hemisphere next year will likely result in higher prices and volumes for American crops.
In addition to trade, President Trump has incentivized historic investments in both American individuals and industries through the Working Families Tax Cut, which is stimulating long-term investment in the productive capacity of the American economy.
By allowing full expensing for factories, equipment, and farm structures, the bill lowers the cost of capital and makes it cheaper to build in America. This has spurred a CapEx Comeback, with a 12% surge in business investment through the first three quarters of 2025—the largest non-pandemic increase in over a decade. More investment means more supply, and more supply means lower prices for the consumer goods families rely on.
Beyond the many benefits for workers and industries in the President’s tax bill, one of its most innovative provisions for families is Trump Accounts. Here, I need to emphasize just how significant Trump Accounts will be in revolutionizing the US investing landscape.
Through Trump Accounts, the President is creating an ownership economy where all citizens become shareholders in America’s wealth. Today, 38% of American adults do not own stocks. But with Trump accounts, over time, we can get that number down to zero.
Trump Accounts aim to achieve this by offering every newborn citizen a $1,000 Treasury contribution to be invested in an index fund. A single $1,000 deposit into a Trump Account at birth should grow to at least half a million dollars by the age of retirement.
The President has called on business leaders all over the country to match the $1,000 Treasury donation to Trump Accounts for the children of all their employees. And I am calling on the men and women in this room to do the same. You all can allocate directly to the children of Minnesota, Minneapolis, or any zip code of your choice. With your patronage, we can ensure a strong financial future for America’s children.
President Trump has left no stone unturned in his effort to spur investment in the American economy—from reordering the global trade landscape to creating an entirely new investment vehicle for newborn Americans. But the White House can only do so much; at a certain point, the Federal Reserve must also do its part to spur investment.
The Fed needs to have merely an open mind. The open-mind maestro, former Fed Chairman Alan Greenspan, resisted premature rate hikes during the technology boom of the 1990s—and history proved him right.
Innovation
Innovation is the second I designed to boost businesses and improve quality of life for American families under President Trump.
The Biden administration displayed outright hostility to America’s innovators and entrepreneurs. An endless string of regulations increased compliance costs, and heavy taxes made it more expensive than ever to do business. But President Trump has fixed that.
On the tax front, the Working Families Tax Cut encourages heavy investments in innovation by restoring immediate expensing of R&D costs. Businesses can now fully deduct domestic research and developmental outlays in the year incurred, instead of having to spread these costs over several years. This new tax provision empowers companies to secure larger tax benefits sooner, allowing them to invest more of their capital into R&D. It also encourages the buildout of high-precision manufacturing here at home, which will lead to high-paying construction jobs and factory jobs.
Beyond creating an R&D-friendly tax environment, President Trump has reduced the regulatory burden on American companies to let them innovate again. Thanks to his efforts on deregulation, community banks can now lend more readily to working families, small businesses, and farmers. This is in stark contrast to the regulatory regime that crushed small banks under previous administrations.
Since 2010, nearly half of all community banks disappeared. The unintended consequence of “Too big to fail” was “Too small to succeed.” And so, President Trump has taken executive action to empower small banks to compete on a more even playing field with larger competitors.
Our President is also reducing regulatory burdens on entrepreneurs to keep our nation at the bleeding edge of global tech. With new innovations in technology, some economists worry about the labor market decoupling from GDP growth. But they are missing the forest for the trees.
As my friend and former NEC Director Dr. Lawrence Lindsey recently observed, there is a simple word to describe the difference between output growth and the growth of labor inputs: productivity. And while corporations may capture higher profits from higher productivity at first, higher real wages for America’s workers won’t be far behind.
Income
The third I concerns what your employees care about the most: real take-home incomes.
Incomes shrunk sharply under President Biden. Real weekly wages decreased by 2% during his presidency. All the while, embedded inflation made it almost impossible for Americans to catch up. But President Trump is fixing that too.
Thanks to the President’s pro-worker, pro-growth policies, real wages have climbed more than 1% since he took office, with blue-collar wages increasing at one of the fastest rates in decades. This is just step one in the President’s plan to raise incomes for all Americans.
The President’s bill prevented a $4.5 trillion tax hike, allowing the average American to keep up to $7,200 more in annual real wages and the average family of four to keep up to $10,900 more in take-home pay. For millions of families, such savings are the difference between making a mortgage payment, buying a car, or sending a child to college.
The President’s bill raised and made permanent the Working Families Child Tax Credit. It delivers for seniors by giving 88% of retired Americans a new deduction that eliminates tax on Social Security benefits. And it codifies no tax on tips and no tax on overtime pay so Main Street workers can keep more of their hard-earned income—something the Grinch who stole prosperity in the Governor’s Mansion has not done in the Minnesota tax code.
Thanks to the President’s forward-thinking reforms, millions of Minnesotans and Americans may see the largest tax refunds of their lives. And as withholdings are adjusted, millions will take home bigger paychecks every month this year.
The President wants to get this money into the hands of the American people as soon as possible. That’s why I am proud to break the news here today that this year’s tax season will begin on January 26—one of its earliest starts in a decade. After this date, most of the benefits of the President’s bill will begin to materialize, presenting a major tailwind for our economy in 2026.
Tax cuts are an obvious way to increase incomes. But just as necessary is reducing the tax burden on American families by eliminating waste, fraud, and abuse. No one is more committed to this cause than President Trump.
Minnesota is ground zero for what may be the most egregious welfare scam in our nation’s history to date. Under Governor Tim Walz, billions of dollars intended for families in need, housing for disabled seniors, and services for children were diverted to benefit fraudsters. I am here this week to signal the US Treasury’s unwavering commitment to recovering stolen funds, prosecuting fraudulent criminals, preventing scandals like this from ever happening again, and investigating similar schemes state by state.
Conclusion
Taken together, President Trump’s policies have delivered a historic economic comeback in record time. Where the previous administration created stagnation and privation, this President has unleashed investment, innovation, and rising incomes. The result is an American economy that is stronger, more resilient, and more affordable for working families.
With capital flowing, productivity surging, and prices easing, the stage is set for robust, non-inflationary growth in 2026. The Trump economy is back—and its best days are still ahead.
President Trump has charted the course for economic renewal; now it’s up to individual states to follow it. Minnesota should lead the way.
For four years under Biden, Minnesotans had a President who prioritized punishment over partnerships in his dealings with the business community. But this is no longer the case under the new administration. President Trump is the best partner an American job creator could ever have. That’s why he has prioritized low taxes, as well as a safe and sound, light-touch approach to regulation.
Our President has restored tax and trade certainty, making this the best decade in a generation to build a business. So come build with us. Join us in investing directly in America’s workforce, infrastructure, and industrial base. Together we can make Minnesota and this country great again.
Thank you.
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