HIS COMMENT ADDS PRESSURE TO THE MONETARY DEBATE AS INFLATION COOLS AND MARKETS SEEK CLARITY
White House Advisor Kevin Hassett said the Federal Reserve should “cautiously” begin cutting interest rates, pointing to cooling inflation and improving economic stability.
White House economic advisor Kevin Hassett said Tuesday that the Federal Reserve should begin cautiously cutting interest rates, arguing that economic indicators suggest conditions are stabilizing enough for a gradual policy shift. His remarks come as markets increasingly speculate about the Fed’s next moves following months of cooling inflation data.
Hassett emphasized that any cuts should be “deliberate and incremental,” warning that aggressive easing could risk overheating certain sectors or reversing hard-won progress on inflation. Still, he noted that holding rates too high for too long may restrict lending, slow job growth and undermine business investment.
Economists remain divided. Some analysts agree with Hassett’s position, saying that easing financial conditions could support consumer spending and refresh corporate hiring. Others caution that inflation, while cooling, remains above the Fed’s long-term target, suggesting the central bank should maintain a wait-and-see approach.
The Federal Reserve has not publicly responded to Hassett’s remarks. Fed officials have repeatedly stated that decisions will be driven by incoming data, signaling that rate cuts are possible later this year if inflation continues trending downward.
Hassett’s comments also carry political weight, as the White House and Congress closely watch interest-rate dynamics heading into an election cycle. Lower rates could ease mortgage pressures, reduce borrowing costs and help soften credit-market stress.
The Fed’s next policy meeting is expected to provide more clarity on timing, projections and conditions for any potential shift.
