US White House NEC Director Hassett says cannot discuss whether Fed Chair Powell gave White House heads-up and on Powell staying on, says he is disappointed in what Powell said
- Would be policy error for ECB's or Fed to hike rates.
- Mistake to hike rates into temporary energy spike.
- Productivity boom will keep core prices under control.
- New housing construction could lift growth to 4-5%.
- Productivity boom will keep core prices under control.
Context
Director Hassett's comments suggest a dovish stance regarding rate hikes from both the Fed and the ECB, emphasizing caution amid temporary energy price spikes. His belief that productivity gains will help contain inflation implies we may not see aggressive tightening soon, which could impact USD and fixed income markets positively. This adds a layer of uncertainty around Fed Chair Powell's communication and future policy direction, particularly if there is perceived misalignment with White House expectations.
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