Economy can grow in 3% range with no surprises from Trump or Congress, Tepper says

GOP win released 'animal spirits': David Tepper

With Republicans controlling the White House and Capitol Hill, U.S. economic growth could get a boost into the 3 percent range, hedge fund billionaire David Tepper told CNBC on Wednesday.

"I think we can get into the 3s," Tepper said on "Squawk Box." "I don't want to say no doubt about it, but I think there's a high probability we'll be in the 3s."

The economy expanded at an annual rate of 1.9 percent in the fourth quarter of 2016, according to the government's second estimate for the period.

If that number were to hold in the final revision out later this month, gross domestic product for all 2016 would only be up 1.6 percent, the worst performance since 2011.

GDP grew 2.6 percent in 2015.

"By the way," Tepper said about getting to the 3 percent range, "all the probabilities stacked, you have to bet against these Republicans screwing it up. They should be able to get it."

Tepper, who was sharply critical of Donald Trump during the presidential campaign, did say he would be happy if the president were to tighten things up and not tweet as much.

But having a GOP president and Republican majorities in the House and Senate means the end of business-zapping regulations, he argued.

"People say people are holding back because of uncertainty. Bull----," said Tepper, founder and president of Appaloosa Management, which has $17 billion in assets under management.

"From a business standpoint, not one more regulation is happening, and potentially you have tax cuts coming your way," he added.

In the absence of some unforeseen and unlikely upset in Washington, there's nothing to bother business leaders until inflation picks up, Tepper said.

"I know people don't think there's going to be inflation," he said, "because they remember the last 10 years."

But he warned the Federal Reserve needs to have a balance of interest rate hikes to keep the economy from overheating.

Wall Street widely expects Fed policymakers to increase rates at next week's meeting after they moved the cost of borrowing higher in December for just the second time in a decade

Central bankers in December hinted at three more rate hikes in 2017.