Hassett on Powell Staying at Fed, Inflation and Oil Spike

Hassett argues the economy is in a productivity boom with 2% GDP and capital spending surge, making rate cuts safe despite temporary oil spike. He expects energy normalization if Iran negotiates, and sees Kevin Warsh as a sea change for Fed independence. Cutting rates could lift GDP to 4-5% without inflation, echoing Greenspan's 90s.

implicit

explicit

Metals

USD

National Economic Council 6.2
Government Agency
Kevin Hassett 7.0

Hassett on Powell Staying at Fed, Inflation and Oil Spike

Oil

wti

We have triple-divered crude this morning WTI much higher... our expectation is that things are going to get better very, very quickly Hassett describes the oil shock as temporary and expects normalization soon, but acknowledges current sharp rise due to Iran disruption.

3/17/2026 7:07:05 PM	long term cautious down	61 days later	+12.81%	-6.41%

Asks about administration heads-up on Powell's announcement and the president's disappointment.

Host
Kevin Hassett

Communications with Fed are open but can't discuss details; disappointed in Powell, but awaiting Kevin Warsh's confirmation as a sea change.

Justice Department has stood down, asked IG to look into it; time to de-escalate.
Asks if the president has de-escalated and if the Treasury Secretary's insult claim complicates Fed operations.

Host
Kevin Hassett

Avoids White House-Fed argument; Kevin Warsh will bring fresh leadership and respect Fed independence.

IG request is respectful of Fed independence.
Asks if there is space to wait before reducing rates given strong economic data.

Host
Kevin Hassett

Economic data is blockbuster: 2% GDP, capital spending boom, low claims, low government employment. Energy disruption is temporary; raising rates into a temporary oil shock would be a policy error.

Core inflation is fine; futures markets agree disruption is temporary; best forecast of future inflation is core, not headline.
Asks if Hassett agrees with Treasury Secretary Bessent on staying on hold.

Host
Kevin Hassett

Highly confident productivity boom will keep core prices under control; cutting rates could supercharge the economy without being inflationary.

Greenspan in the 90s showed high growth without inflation; residential investment is weak due to high rates, new construction could lift GDP to 4-5%.
Asks about pathway to lower rates given long-end yields at 5% and risk of steepening.

Host
Kevin Hassett

In a positive supply shock, front-end cuts won't necessarily steepen the curve; Kevin Warsh has ideas on balance sheet management to help homeowners.

Getting the last bit of economy going could bring back golden days.
Notes WTI is sharply up, California gas over $6; asks what else the White House is considering beyond Jones Act waiver.

Host
Kevin Hassett

Expects energy prices to improve quickly if Iran negotiates; Iran's production dropped from 5M to 1M bpd under Trump sanctions, then recovered under Biden.

Iranian regime is suicidal; they are running out of storage and may have to shut in wells, but past experience shows they can recover production.
Reads President's social media post criticizing German Chancellor; asks about relationship with European partners.

Host
Kevin Hassett

European partners are stressed due to unwise energy policies; Germany's anti-free market policies limit growth to 1%.

Best way for Europe to recover is to help resolve the Iran problem and reform their own policies.

SignalTube

markets at a glance