National Economic Council Chairman Kevin Hassett said Wednesday there was no discussion of raising interest rates given the latest data on the U.S. economy, including an “alarming” inflation report.
“There’s absolutely no excuse to raise rates at this point,” Hassett said on CNBC’s “Squawk Box.”
He said if the data trend continues, he expects the Fed will “think differently” – lowering interest rates.
Hassett added that the White House expects Federal Reserve Chairman Kevin Warsh, who President Donald Trump took over in late May, “to guide the committee to the right answers.”
Mr. Hassett’s preference for low interest rates coincides with Mr. Trump’s persistent calls for the U.S. central bank to quickly lower interest rates to stimulate the economy and make borrowing cheaper.
The economist’s appearance on CNBC came a day after the latest consumer price index, which measures the cost of a wide range of U.S. goods and services, was significantly lower than expected.
The U.S. Bureau of Labor Statistics reported that the CPI fell by a seasonally adjusted 0.4% in June, bringing the annual inflation rate to 3.5%, better than expected by Dow Jones economists. This was the largest decline in consumer prices in more than six years.
Hassett said in an interview Wednesday that this was “one of the best inflation reports I’ve seen in my career.”
While he attributed this change to President Trump’s policies, he pointed out that the fall in oil prices due to the progress of the US war against Iran was not the only factor behind the decline in oil prices.
“My staff and I looked into it and found that because President Trump has focused law and order on big cities, it’s much cheaper to get insurance now because people aren’t going to steal your car,” Hassett said.
But Warsh didn’t seem too keen on spiking the football following Tuesday’s reports.
“Some people may look at the numbers this morning and say, ‘Oh, mission accomplished, everything is fine,'” he said in testimony before the House Financial Services Committee on Tuesday. “That’s not my view.”
