Kevin Hassett Warns US Is Falling Behind The Curve On Rate Cuts: Report

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The National Economic Council Director said the third-quarter GDP data signals that President Donald Trump’s trade agenda is working and that the AI productivity boom is reflected in the data.

  • Hassett said the Federal Reserve has been slow in adjusting monetary policy in line with changing economic conditions.
  • Drawing a comparison to the 1990s, Hassett stated that technology-driven expansions tend to increase the availability of goods and services.
  • The Bureau of Economic Analysis said the U.S. economy expanded at an annualized rate of 4.3% in the third quarter.

White House National Economic Council Director Kevin Hassett reportedly stated on Tuesday that the Federal Reserve has been slow to adjust monetary policy to reflect changing economic conditions, particularly as new technologies reshape growth and inflation dynamics.

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Speaking to CNBC, Hassett said the GDP data for the third quarter (Q3) signals that President Donald Trump’s trade agenda is working and that the artificial intelligence productivity boom is clearly shown in the data.

GDP Data 

In Q3, the U.S. economy expanded more than expected, supported by strong consumer purchases, rising exports, and increased government spending.

The Bureau of Economic Analysis said the U.S. economy expanded at an annualized rate of 4.3%, beating the Dow Jones forecast of 3.2%.

Interest Rate Debate 

Hassett said the U.S. trails other major economies when it comes to easing borrowing costs, especially during periods when supply-side forces expand rapidly. 

“If you look at the central banks world over, the US is way behind the curve in terms of lowering rates.”

— Kevin Hassett, Director, National Economic Council

Drawing a comparison to the 1990s, Hassett stated that technology-driven expansions tend to increase the availability of goods and services. That added supply, he explained, can lift economic growth even as it dampens upward pressure on prices, creating conditions where lower interest rates may be justified.

Though Hassett is in the race for the Fed Chair position, he has faced pushback from top advisors close to Trump due to his close ties with the President.

In an interview with CNBC last week, Hassett said that the Fed’s independence is important, while adding that a candidate should not be disqualified for being President Trump’s close friend.

While President Trump has called on the Fed to consult him while making interest rate decisions, Hassett stated that there is a need to build consensus at the central bank.

“The President is a seasoned observer of the economy, and if he has a good point, then I’m sure others will recognize it as such,” he said in the interview.

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