Hassett sees no 'excuse' to raise rates, says Warsh will push Fed to 'right answer'

• June CPI fell 0.4% month-over-month, the biggest decline in over six years, bringing annual inflation down to 3.5% and beating economist expectations
• Hassett called it 'one of the best inflation reports' in his career and credited Trump's policies, including law and order focus reducing insurance costs
• New Fed Chair Kevin Warsh struck a more cautious tone, stating 'mission accomplished' is not his view despite the positive data

Summary:

National Economic Council Director Kevin Hassett stated Wednesday there is no justification for raising interest rates following recent U.S. economic data, particularly the June Consumer Price Index report. Speaking on CNBC's "Squawk Box," Hassett called the CPI reading "one of the best inflation reports that I've seen in my entire career."

Key Data Points:

• June CPI fell 0.4% (seasonally adjusted), marking the largest decline in over six years
• Annual inflation rate dropped to 3.5%, beating Dow Jones economist expectations
• The decrease exceeded market forecasts significantly

Main Officials and Positions:

Hassett indicated the Federal Reserve should be "thinking the other way," meaning toward rate cuts if current trends continue. He expressed confidence that Fed Chair Kevin Warsh, President Trump's appointee who recently assumed the role, will "drive the committee to the right answer." This aligns with Trump's persistent demands for the Fed to slash rates to stimulate economic growth and reduce borrowing costs.

Market Context:

Hassett attributed the positive inflation trends to Trump administration policies, citing improved urban safety leading to lower insurance costs as one factor beyond energy price declines.

Contrasting View:

Fed Chair Warsh took a more cautious stance, testifying before the House Financial Services Committee that he does not view the report as "mission accomplished," suggesting a more measured approach to policy decisions despite the favorable data.

The divergence between White House optimism and Fed caution highlights ongoing tension over monetary policy direction.