Hassett Says No Rate Hike Excuse After Cool CPI Print
White House economist Hassett pushes back on rate hikes after surprise CPI drop, backing Warsh to steer the Fed right.
Kevin Hassett went on CNBC and made it plain: there's zero justification for the Fed to raise rates right now. The White House economic adviser leaned hard into the latest consumer price index reading, which came in well below expectations, as proof that inflation is cooling on Trump's watch. No wiggle room, no ambiguity — Hassett called it a win and said policymakers should read the room.
Hassett gave direct credit to President Donald Trump's economic agenda for the softer inflation number. That's a deliberate signal — the administration wants markets and the Fed to connect the dots between White House policy and the disinflation trend. If you're a trader, that framing matters: it sets up a political narrative that could accelerate pressure on the Fed to hold or cut.
Read more Kevin Warsh Faces Senate on Economy and Rate Outlook →
On the question of Fed leadership, Hassett name-dropped Kevin Warsh, suggesting the former Fed governor would push the central bank toward the "right answer." That's coded language for rate cuts, or at minimum a dovish pivot. Warsh has long been discussed as a potential Fed chair pick, and Hassett's public endorsement adds fuel to speculation about the Fed's future direction under this administration.
Bottom line for traders: the White House is building a case — CPI as exhibit A — that the Fed has no business tightening further. If Warsh does land at the top of the Fed, expect the policy debate to shift fast. Watch rate-sensitive sectors and dollar positioning closely as this narrative develops.
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