Kevin Hassett, Director of the National Economic Council, stated on Monday that he continues to anticipate the Federal Reserve will be able to lower interest rates, despite a sharp rise in energy costs.
In an interview, Hassett indicated that once the supply shock from oil subsides, technology-driven productivity gains will help curb inflation, creating room for the Fed to support the economy through more accommodative monetary policy.
He noted that capital expenditure and advancements in artificial intelligence will "exert downward pressure on inflation, thereby easing the burden on the Fed. They should be able to cut rates, and I expect this to happen once my friend Kevin Warsh takes office."
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