Inflation and higher interest rates are still two of the biggest obstacles for the Federal Reserve in 2024, a year in which many experts eagerly anticipated a slew of rate cuts to come forth. Now, Fed officials are still getting a grasp on economic data to get an idea on how to effectively implement their monetary policy.
Former Council of Economic Advisors Chair under the Trump administration, Kevin Hassett, sits down with Yahoo Finance’s Brian Sozzi and Akiko Fujita at the 2024 Milken Conference to discuss the Fed’s inflation journey and how much it has left to conquer and ease economic conditions for Americans.
“The Fed’s [inflation] modeling has been wrong, and it’s been wrong from the beginning when they were saying it was transitory. I think that the conversation about inflation is like everything in our life, perhaps colored by partisanship, inflation is a big negative for President Biden politically,” Hassett states. “But if you just truthfully look at the data, think about what the forecast over the next few months is that, you’re basically looking at inflation’s going to continue to run at a 4-5% annual rate, and the Fed should be really upset about that and they should do something about it.”
Hassett views “runaway spending” contributing to the deficit in the national budget as the true culprit behind inflation, believing that Fed Chair Jerome Powell should take a note from former Fed Chair Alan Greenspan to quell government spending.
As of late, Hassett has been reported to be one of three names proposed by advisers to former President Trump as a potential replacement for Jerome Powell as the Fed’s chair.
Catch more of Yahoo Finance’s coverage at the 2024 Milken Institute Global Conference.
This post was written by Luke Carberry Mogan.