A top White House economic adviser expressed optimism Monday that recent technological advances and business investments could pave the way for the Federal Reserve to reduce interest rates.
Kevin Hassett, speaking during a CNBC interview on April 6th, argued that what he describes as a “supply shock” driven by artificial intelligence improvements and increased capital investment is creating favorable economic conditions.
“If we have a supply shock like we’re seeing because of all this capital spending … AI increasing productivity, it puts downward, downward pressure on inflation, and that should take the pressure off the Fed. They should be able to lower rates,” Hassett explained during the television appearance.
The economic adviser also indicated his expectation that interest rates would decline under the leadership of Kevin Warsh, whom President Donald Trump has nominated to serve as the next Federal Reserve chair.
