Hassett Says No Reason to Hike Rates After Cool CPI Print
White House economist Hassett sees zero justification for rate hikes after a surprise CPI miss, and expects Warsh to steer the Fed right.
Kevin Hassett isn't mincing words. After the latest Consumer Price Index reading came in well below expectations, the White House economic adviser went on CNBC and said there's simply no excuse for the Federal Reserve to raise interest rates right now. When inflation surprises to the downside like this, that's the kind of data that backs up a hold — or even a cut.
Hassett was quick to credit President Donald Trump's economic policies for the cooler inflation print. The message from the administration is clear: their agenda is working, and the Fed should take notice. Whether you buy the political framing or not, the CPI number speaks for itself — and it's speaking dovishly.
Read more NY Empire State Manufacturing Crushes July Forecast at 15.6 →
On the Fed's future leadership, Hassett expressed confidence in Kevin Warsh, suggesting the former Fed governor would push the central bank toward the 'right answer.' That's a pointed statement. Warsh is widely viewed as a potential Fed Chair candidate, and signals like this from inside the White House carry weight for anyone trading rate-sensitive assets.
For traders, the playbook here is straightforward. A surprise CPI downside beat plus White House pressure for no hikes equals a tailwind for bonds and rate-sensitive equities. Watch how the market prices Fed expectations into the next FOMC meeting — this kind of political-plus-data combo can move the needle fast.
Continue reading at US Top News and Analysis
