Watch CNBC's full interview with White House National Economic Council Director Kevin Hassett

White House is openly campaigning for Warsh to replace Powell, framing the current Fed as having 'lost its way.' The narrative playbook: dismiss the oil shock as transitory noise. The real story is a powerful supply-side boom (AI, tax cuts, deregulation) set to deliver 4-5% GDP. This justifies record equity markets against a bond market screaming inflation risk (30Y > 5.2%). The administration is attempting to talk down the long end and re-anchor policy expectations.

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National Economic Council 6.2
Government Agency
Kevin Hassett 7.0

Watch CNBC's full interview with White House National Economic Council Director Kevin Hassett

ndx

AI companies are printing money; earnings have been positive surprises quarter after quarter.

1/21/2026 7:43:06 PM	short term up	5 days later	+1.65%	+1.65%
11/11/2025 6:57:30 PM	medium term up	20 days later	+0.15%	+0.15%
8/25/2025 4:05:09 PM	medium term cautious up	20 days later	+3.27%	+1.63%
8/4/2025 8:45:23 PM	short term cautious down	6 days later	+2.21%	-1.10%
8/4/2025 4:01:32 PM	short term cautious down	6 days later	+2.21%	-1.10%

wti

The spot market for oil people are actually kind of unwilling to buy oil at the spot market because it takes two months to get it to Australia and by then the price might be down a lot.

5/11/2026 6:30:22 PM	short term cautious up	6 days later	+6.34%	+3.17%
4/30/2026 5:19:10 PM	short term sharp up	5 days later	-6.73%	-10.09%
3/17/2026 7:07:05 PM	long term cautious down	61 days later	+12.81%	-6.41%

If Kevin Warsh doesn't cut rates, no one will say he's doing the wrong thing because of what's happening in Iran and with oil prices.

Speaker1
Kevin Hassett

If inflation blips up because of a short-term oil shock, that shouldn't affect long-run policy; the Fed should keep its eye on the horizon.

The president feels the Fed lost its way, didn't become data dependent, but trusts Kevin Warsh will be data dependent.
Some on the Fed said even the easing language needs to be removed and the next move most likely is a hike.

Speaker1
Kevin Hassett

We respect the independence of the Fed; now we expect it's independent again.
The 30-year yield touched 5.2%, highest since 2007; UK gilts highest since 1998; Japan 30-year bond at highest on record.

Speaker1
Kevin Hassett

There's an oil shock and risk it feeds through to core inflation and expectations; but core has barely moved.

The best forecast of top-line inflation is core today; producer prices moved up more than anticipated.
We were at inflation above target before the Iran war.

Speaker1
Kevin Hassett

If the oil shock is persistent it will cascade prices, but if Trump's view of a resolution is correct, the spot market for oil shows unwillingness to buy because prices might be down in two months.

There are competing forces; we have a trusted independent Fed chair who will look at all data.
Kevin Hassett

We had the biggest capital spending month ever, AI increasing productivity, deregulation pushing prices down.

Biden's rule on grocery store refrigerators forced closures; Trump fixed it, lowering grocery prices. Focusing only on energy prices is shortsighted.
Certain people at the Fed remember 'transitory' and might be fighting the last battle, willing to admit hyperinflation risk.

Speaker1
Kevin Hassett

The COVID stimulus and green bills created classic boom in aggregate demand with supply constraints; the Fed was in denial.

John Cochrane and I wrote an article saying this would create runaway inflation; it's Econ 101.
Could there be pressure to actually raise rates?

Speaker1
Kevin Hassett

Hopefully Jay Powell will step aside and Kevin Warsh will have complete control of the Fed.

We respect Fed independence but asked their own inspector general to look into the building.
We're seeing new highs consistently in the Nasdaq, S&P, and Dow in spite of tariffs, inflation, and war.

Speaker1
Kevin Hassett

AI companies are printing money; earnings have been positive surprises quarter after quarter.

We have a big supply-side shock from corporate tax cuts and from no tax on tips and overtime. GDP will settle at 4-5% for the rest of the year.
Rick Santelli does not think interest rates should be lowered because he worries about inflation.

Speaker1
Kevin Hassett

We reduced federal workers by about 350,000, a permanent reduction in spending.

Growth will reduce the deficit.

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