Kevin Hassett Says Inflation Is Below Target, Backs Trump’s Call for Rate Cuts

White House economic advisor Kevin Hassett said President Donald Trump is correct in claiming inflation is low, despite official data, public sentiment, and many economists suggesting otherwise. Speaking on Fox Business, Hassett argued that inflation should not be judged on a traditional year-over-year basis, but rather through a shorter-term lens such as a three-month moving average, which he says paints a far more favorable picture of current price pressures.

According to Hassett, when inflation is measured on a three-month average, it is running at roughly a 1.6% annualized rate, below the Federal Reserve’s long-standing 2% target. He said this method better reflects current economic conditions and aligns with how President Trump views inflation trends. Hassett added that relying solely on year-over-year data can exaggerate inflation risks by placing too much weight on earlier price spikes.

The comments come after the U.S. government reported that the Consumer Price Index rose 2.7% year over year in November, down from 3% in September. Although the CPI showed moderation, inflation remains above the Fed’s target, and the report itself was delayed due to the government shutdown, adding to uncertainty around the data. Many Federal Reserve officials remain cautious, expressing concern that price pressures are still elevated and that Trump’s tariff policies could push inflation higher in the months ahead.

President Trump has continued to push aggressively for interest rate cuts, arguing that inflation is no longer a serious concern. This stance contrasts with the view of several Fed policymakers, including New York Fed President John Williams, who recently said he sees no urgency for further monetary easing. Williams also noted that technical issues related to the shutdown may have made inflation data appear slightly better than reality.

Hassett pushed back on that assessment, saying the data disruptions will ultimately prove insignificant once error margins are fully analyzed. He argued that the latest inflation readings are “great news” and signal that the Federal Reserve has ample room to cut rates further. Hassett is reportedly among the leading candidates to succeed Fed Chair Jerome Powell when Powell’s term ends in May, adding further weight to his remarks on inflation and monetary policy.