Emre Yumlu 
Kevin Hassett is once again at the center of economic discussions with his latest statements. Currently serving as the Director of the National Economic Council, Hassett argued that the Federal Reserve should move forward with interest rate cuts, stating that he shares the same view as President Donald Trump and Fed official Christopher Waller. But why is Hassett calling for a rate cut, and how realistic is this stance?
Hassett’s Message on Rate Cuts Is Clear
Kevin Hassett’s comments represent an alternative economic perspective to the Fed’s current policy stance. According to Hassett:
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Inflation is under control.
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The labor market remains strong.
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Conditions are suitable for a rate cut.
He believes that the Fed should take more decisive steps, especially considering global economic trends.
Hassett: “Fed official Waller and Trump are right about interest rates. There is no reason why the Fed shouldn’t cut rates.”
Why Is Powell Holding Back?
Fed Chair Jerome Powell, however, has a different outlook. Powell warns that external factors such as rising oil prices and new tariffs could drive inflation higher in the near future. In particular, the surge in energy prices is believed to put upward pressure on the Consumer Price Index (CPI).
Because of these concerns, the Fed is taking a cautious stance toward a potential rate cut in September. However, market expectations differ: According to CME Group data, investors see a 76% probability of a rate cut in September.
Global Trend: Other Central Banks Have Started Cutting Rates
Another point supporting Hassett’s view is the global approach of other central banks. Major institutions like the European Central Bank (ECB) and the Bank of Canada (BoC) have already begun reducing interest rates.
If the U.S. lags behind this trend, the dollar could strengthen further, which might harm the competitiveness of U.S. exporters. This strengthens Hassett’s message: “Now is the time to act.”
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