National Economic Council Director Kevin Hassett argued on FNC’s “Sunday Morning Futures” that any Iran deal reopening the Strait of Hormuz could quickly bring oil and gas prices down, and said he welcomes Kevin Warsh as a seasoned hand to give the Fed room to cut rates.

HASSETT: Well, I think that, first of all, I have a great friendship with Kevin. We have been friends for something like three decades. We were almost in offices next to each other at Stanford University before I came back here and he went over there. And when the president asked me did I think he’d be a great Fed chair, I said, absolutely, he would. And I think one of the reasons is, he’s got the experience. He came in, in ’08 during the financial crisis as the youngest Fed governor ever. And so he’s basically a seasoned hand who’s coming in to handle a tricky situation. But the bottom line is this, that there are enormous number of factors that are putting downward pressure on prices, like the deregulatory effort for grocery prices we talked about last week, like the big supply shock from A.I., which increases supply and puts downward pressure on demand, the massive capital spending boom that we’re seeing right now. So, there are a lot of things that are pushing downward pressure on prices — or putting downward pressure on prices. Energy is putting an upward pressure on price. I think a lot of people are thinking, geez, it should be that energy is the only story, but it’s really not the only story. It’s not even the bigger story, which is why core inflation has stayed about where it is. Again, we expect energy prices, as soon as there’s a deal, to plummet. And when that happens, then there will be a lot of room for the Fed to do the right thing at lower rates. But, again, I respect the independence of the Fed and the intellect of Kevin Warsh, and I’m sure that he will work it out on a data-dependent way. President Trump emphasized over and over — I was there with him when Kevin was sworn in — that he expects the Fed to be independent, and he expects Kevin to look at the data, do the right thing, and I expect that as well.
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