Hassett sees Fed acting if October inflation data come in high
(Bloomberg) — White House National Economic Council Director Kevin Hassett hinted that he expected the Federal Reserve would raise interest rates if inflation figures for this month are elevated.
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“If October comes out really high, then I think the Fed would probably appropriately act,” Hassett said in a Bloomberg Television interview Thursday. After the month’s consumer price index and so-called PCE price gauge are out, “at that point, I think it would be clear what the Fed should do,” he said.
Hassett was speaking shortly after the latest PCE inflation report showed that core price gains, which exclude food and energy, clocked a 3.1% year-on-year pace for September. Overall PCE inflation ran at 3.6% last month, well over the Fed’s 2% target. He said that if October prices slow, that would suggest September was just a “blip.”
On Wednesday, Treasury Secretary Scott Bessent was asked if he’d view any future Fed rate increase as a policy mistake. He responded on CNBC, “that’s not necessarily so,” and cited strong economic growth.
Hassett also indicated he had little issue with the two dissenting votes in favor of raising interest rates on the policymaking Federal Open Market Committee on Wednesday. Fed Chairman Kevin Warsh “has done a good job of allowing normal dissent and driving a consensus,” he said.
“His committee has made a decision that looks very data-driven to us, and so I don’t have a concern about the committee right now,” Hassett said.
Fed Governor Lisa Cook and Federal Reserve Bank of Cleveland President Beth Hammack voted in favor of raising rates this week. Cook is the target of a panel set up by the White House to investigate mortgage-fraud allegations the administration has levied against her. Hassett is one of the three panel members, and declined to comment on the deliberations. He did say that “people can dissent if they want, it’s a completely fair process.”
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