WASHINGTON — A former White House economist on Tuesday said he thinks the Federal Reserve will hike rates of interest again amid rising inflation numbers and energy prices.
“The mountaineering is coming again,” Kevin Hassett, former chairman of the Council of Economic Advisers under then-President Donald Trump, told CNBC’s “Squawk Box.”
“The inflation numbers are going to surprise on the upside because gas prices have gone up a lot and … we’re looking probably for a top-line (consumer price index) of 0.8 or so,” he added.
Hassett was referencing headline inflation, a measure of the entire inflation throughout the economy including commodities akin to food and energy. The CPI rose 0.2% for the month in July and three.2% compared with the yr prior. Though the annual rate of headline inflation got here in below expectations, it marked a rise from 3% in June, in line with the U.S. Bureau of Labor Statistics.
Fed Chair Jerome Powell warned last week that rates of interest might be raised again to scale back inflation back to its 2% goal. The Fed’s Federal Open Market Committee has raised rates of interest 11 times since March 2022.
“We will see sort of a sawtooth inflation cycle,” Hassett said. “It should be sort of just like the Covid waves where it appears like Covid’s under control after which there is a latest variety.”
