White House economic adviser Kevin Hassett said Tuesday there is "plenty of room" to cut interest rates further, though he noted that rising inflation could alter this outlook.
Speaking at the WSJ CEO Council, Hassett, who is widely considered a front-runner to become the next Federal Reserve chair, compared the current economic environment to the 1990s, describing it as a "potentially extremely transformative time."
When asked how he would respond if President Donald Trump requested interest rate cuts that he personally disagreed with, Hassett provided a specific example of when rate cuts would be inappropriate. "If inflation has gone from 2.5% to 4%, you can't cut rates then," he said, according to a tweet from Wall Street Journal Fed reporter Nick Timiraos.
The comments from Hassett come ahead of the FOMC's two-day meeting, which started today. On Wednesday, the FOMC is widely expected to cut interest rates by 25 bps to a range of 3.5-3.75%. If they follow through with a cut, it will be their third straight meeting with a cut since restarting their rate-cutting cycle in September.
Source: Investing.com
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