National Economic Council Director Kevin Hassett said Wednesday he sees no argument for raising interest rates in light of the latest data on the U.S. economy, including a “surprising” inflation report.
“There’s really no excuse to raise rates right now,” Hassett said on CNBC’s “Squawk Box.”
He said he expects if the data trends continue, the Federal Reserve will “think the other way,” which would mean lowering interest rates.
Hassett said the White House hopes Fed Chairman Kevin Wersh, President Donald Trump’s pick, who started the job in late May, will “lead the committee in the right direction.”
Hassett’s tilt toward low rates matches Trump’s insistence that the U.S. central bank should cut rates immediately to boost the economy and make borrowing cheaper.
The economist’s CNBC appearance came a day after the latest Consumer Price Index reading, which measures the cost of a wide range of U.S. goods and services, was much lower than expected.
The CPI declined a seasonally adjusted 0.4% during June, bringing the annual inflation rate down to 3.5% and exceeding Dow Jones economists’ expectations, the Bureau of Labor Statistics reported. It was the biggest fall in consumer prices in more than six years.
“This was one of the best inflation reports I have seen in my entire career,” Hassett said in a Wednesday interview.
He credited Trump’s policies for the change, while also saying that the decline was not just related to oil price declines due to developments in the US war against Iran.
“When I investigated this with my staff, the story was that because President Trump has put a big focus on law and order in big cities, it’s much cheaper to buy insurance now because people aren’t going to steal your car,” Hassett said.
However, Warsh was less willing to promote football after Tuesday’s report.
“There may be some people who look at this morning’s data and say, ‘Oh, mission accomplished, everything went well,'” the Fed chairman said in testimony before the House Financial Services Committee on Tuesday. “It’s not my idea.”