Hassett says a cooling inflation print could let the Fed hold rates
The National Economic Council director's comment sets administration rhetoric against a bloc of Fed officials who have spent October arguing for more tightening.
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National Economic Council Director Kevin Hassett said the Federal Reserve may treat a slowdown in inflation as reason to hold interest rates steady. Hassett also said the market has confidence in the incoming Fed chair, even as Fed officials themselves remain split on where rates should go.
That split has hardened through October.
Chicago Fed President Austan Goolsbee added to that hawkish pressure on Tuesday, warning that tariffs and oil prices could push the economy toward stagflation. He has separately said artificial intelligence itself is an inflation problem, a comment reported by Semafor.
Hassett's suggestion that a cooling inflation print could justify a hold puts administration rhetoric directly against that hawkish bloc, and Goolsbee's stagflation warning complicates any simple reading that slower inflation alone means the Fed should stop raising rates. Patience signals from Fed Governors Jefferson and Williams had pulled long-dated Treasury yields off their highs, but none of this week's remarks resolve the hawkish-dovish divide that has driven the long end of the curve this month. Separately, Turkish President Erdogan and Saudi Arabia's Crown Prince discussed Houthi attacks in a phone call on October 13, a conversation with no stated link to the rates debate.