Tag Archive for: Economic

August 2025 PCE Inflation Update: Core Rate Holds Steady at 2.9%, Impacts on Fed Policy and Consumer Spending

Core PCE Inflation Rate Holds Steady at 2.9% in August 2025, Aligning with Market Expectations

In August 2025, the Federal Reserve tracked its main inflation sign—the Core Personal Consumption Expenditures Price Index—and kept it at an annual rise of 2.9%. Economists saw this result. The core PCE, which leaves out wild swings in food and energy prices, grew 0.2% in the month. This data shows slow and steady inflation.

Key Inflation Figures and Economic Indicators

  • Core PCE Price Index: +0.2% month-over-month; +2.9% year-over-year
  • Headline PCE Inflation Rate: +0.3% month-over-month; +2.7% year-over-year
  • Personal Income: Up 0.4% in August
  • Personal Consumption Expenditures (Spending): Up 0.6%

All these numbers match the Dow Jones consensus forecast. This match gives clear ground for policy steps.

Implications for Federal Reserve Policy

The Federal Reserve has a 2% inflation target. The steady core inflation has not made the Fed change its plan much. After the FOMC cut the federal funds rate by a quarter point, the target range stands at 4%-4.25%. Fed members expect two more rate cuts by the end of 2025. Stock futures rose and Treasury yields fell after the report. The market shows trust in a slow easing cycle as inflation stays steady.

Consumer Spending Resilience Amid Tariff Concerns

The report shows how consumers act while tariffs from President Donald Trump play a role. Forecasts had predicted more inflation, but tariffs did not push up consumer prices much. Firms worked with pre-tariff stock and took cost hikes inside. Spending stayed strong because rising income and a rise in the personal saving rate to 4.6% (up 0.2 percentage points) helped. Prices for goods (+0.1%), services (+0.3%), food (+0.5%), energy (+0.8%), and housing (+0.4%) all moved upward.

Economist Chris Rupkey of Fwdbonds said, “Consumers hit it out of the park with strong gains in spending in August, and they showed a similar trend in June and July. Summer was when consumers returned to active spending after backing away from shops and malls when uncertainty and fear set in after the White House tariff events in April and May.”

Fed’s Outlook on Tariff Effects and Inflation

Fed Chair Jerome Powell and team say tariffs will cause a one-time price push without a lasting rise in core inflation. Some Fed members, however, still worry about the room to ease money policy further. Even if markets bet on another rate cut in October, support for cuts later in the year is less strong.

Summary:
The August 2025 inflation report shows core inflation near 3% and spending and income just above forecasts. Tariff issues do not push prices higher, and strong consumer behavior backs the Fed’s slow rate cut plan. Investors and policymakers now look to new economic data to see where inflation and policy head next.

For more detailed analysis and updates on inflation, Federal Reserve policy, and market trends, stay tuned to CNBC.

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Jobless Claims Drop to 218,000: A Silver Lining Amid Labor Market Concerns

Jobless Claims Drop to 218,000, Easing Labor Market Concerns

The U.S. labor market shows strength. Initial jobless claims fall. The number drops to 218,000 for the week ending September 20, 2025. This number beats expectations. Employers hold workers as hiring slows.

Key Highlights from the Report

• 218,000 claims go down by 14,000 from last week’s revised number.
• The number is well under the forecast of 235,000 from Dow Jones.
• Continuing claims, which track those collecting benefits, drop by 2,000 to 1.926 million.

Context and Implications

Data like this comes one week after the Fed cuts its benchmark rate by a quarter percentage point. The target now sits at 4.00%–4.25%. The Fed points out risks in employment. Slow nonfarm payroll growth and low job openings add to the concerns.

Yet, low jobless claims mean that companies do not plan to cut staff. In Texas, for example, unadjusted filings fall by nearly 7,000. ### Broader Economic Strength Amid Uncertainty

Other data shows strength in the economy:

• Q2 GDP grows by 3.8%, a half-point boost from previous estimates. Strong consumer spending helps this rise.
• Personal consumption, which drives a big part of the $30 trillion economy, increases by 2.5% from earlier levels.
• Spending on durable goods—like airplanes, appliances, and computers—rises 2.9% in August despite forecasts for a drop near 0.4%.

Orders for long-lasting goods, even when leaving out transportation and defense, rise. This signals strong demand.

Housing Market Shows Signs of Recovery

The housing market also stands strong:

• Sales of new homes jump 20.5% in August. This jump is the highest since January 2022.
• Existing home sales reach an annual rate of 4 million. This number tops expectations.

Federal Reserve’s Outlook

Fed Chair Jerome Powell speaks on an economy that holds steady against changes in trade, immigration, fiscal, regulatory, and geopolitical areas. He adds that monetary policy remains "modestly restrictive" with room for change.

Market watchers see two more rate cuts in 2025. These cuts may come in October and December meetings.

The latest data on jobless claims, GDP, and consumer spending points to a steady labor market and economy. Fed officials and investors will keep watching these numbers to guide future monetary policy decisions.

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Trump Administration’s Tariff Threat: A Looming Impact on Robotics and Medical Devices

Trump Administration Expands Tariff Investigations to Robotics and Medical Devices

Washington, D.C. – September 24, 2025 — The Trump administration steps up its trade policy. It starts national security probes into imports. The focus stays on robotics, industrial machinery, and key medical devices. The Department of Commerce announced the move on Wednesday. Tariffs may soon target sectors seen as needed for U.S. security. The change might raise costs for buyers, hospitals, and makers.

Broadening the Tariff Net Under Section 232

Under Section 232 of the Trade Expansion Act, probes began on September 2, 2025. The tests check if imports hurt U.S. security. The scan covers robotics and industrial machines. It covers protective gear like surgical masks, N95 respirators, and gloves. It covers consumable items such as syringes, needles, and drugs. It covers devices like wheelchairs, hospital beds, pacemakers, insulin pumps, and heart valves.

The Department of Commerce asks companies for facts. They request data on local production, demand trends, and links in foreign supply chains. Firms are also asked about the effect of foreign subsidies and trade issues.

Earlier Uses of Section 232 and Ongoing Investigations

This step builds on past uses of Section 232. The law was used before to tax cars, auto parts, copper, steel, and aluminum. Other probes inspect imports of drugs, semiconductors, and chip parts. The approach shows worries about over-reliance on foreign parts for key tech.

Trade Implications and Industry Impact

Data from the U.S. International Trade Commission shows heavy machinery imports from Mexico and China. In 2023, these imports made up more than 35% combined. The auto sector may face hard times since it depends on industrial robots. Most robots come from abroad because U.S. production stays low. In 2024, the sector installed 13,747 industrial robots, proving its need for imports.

The medical field may see price hikes on needed devices and protective gear. Some industry leaders worry that higher prices might harm care quality. Scott Whitaker, CEO of AdvaMed, a group for medical technology makers, said:
"MedTech supply chain leaders voice their fears. Higher tariffs may push up costs. This may affect programs like Medicare, Medicaid, and the Veterans Health Administration."

Rick Pollack, CEO of the American Hospital Association, warned that delays in imported medical gear might hurt patient care.

Trade Complexity Amid Existing Tariffs and International Agreements

If new tariffs come, they add to tariffs set by earlier policies. The European Union and Japan have made deals to avoid extra charges on their exports to the U.S.

These investigations show the administration’s plan to boost home production and reduce reliance on foreign parts. The effects on markets and buyers remain a hot topic.

This report changes as the Department of Commerce gathers more input from people and companies. Stakeholders, hospitals, and firms should watch for news on trade, prices, and supply lines.

— Reported by Anniek Bao, CNBC

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Unlocking Economic Potential: U.S. Latino Immigrants Contribute $1.6 Trillion to GDP and Drive Growth in Key Industries

U.S. Latino Immigrants Drive $1.6 Trillion in GDP, Report Reveals

In a study by the Latino Donor Collaborative, U.S. Latino immigrants produced a GDP of $1.6 trillion in 2023. The analysis shows Latino immigrants boost the U.S. economy.

Key Economic Contributions and Growth

Latino GDP grew by 50% from 2015 to 2023. Non-Latino GDP grew by 17% during the same years. Rising education, more business start-ups, and increased work ties help this rise.

  • Latino purchasing power climbed to $4.1 trillion.
  • California led with $989 billion in Latino GDP in 2023. The state is set to pass $1 trillion by 2025.
  • Texas, Florida, and New York also added many billions of dollars in Latino GDP.

The Rising Power of Latino Consumers

As baby boomers spend 4% less each year, Latino households fill the gap. Their spending grows over 3% each year. This rate nearly doubles that of non-Latino households. Economists see Latino buyers as a strong force in U.S. growth. Many companies now design plans to reach them.

Companies Benefiting from Latino Market Focus

Several major brands have grown by connecting with Latino consumers:

  • Modelo became America’s top-selling beer in 2023 by capturing 50% of the Latino market before Michelob Ultra took the top spot.
  • T-Mobile grew more than AT&T and Verizon by reaching more Latino customers.
  • Dr. Pepper doubled its share of Latino buyers in ten years and now follows Coca-Cola while staying ahead of Pepsi.
  • The WNBA earned its highest growth in Latino viewership among professional sports.
  • Kia jumped from 11th to 6th in new car sales as Hispanic market purchases increased by 44.5% in five years.

Economic Risks of Mass Deportations

Some experts warn that plans to remove undocumented immigrants may slow this growth. Dennis Hoffman, an economics professor at Arizona State University and lead author of the report, sees a risk in deporting up to 8.3 million undocumented workers. He links this move to risks for over 19.5 million jobs because of the drop in overall economic work. Hoffman explains that such removals may cut U.S. GDP by $2.3 trillion—a fall of 7.7%. This drop would put at risk many businesses and communities that depend on Latino work. He calls for system changes that mix firm rules with safe paths for work. He states, “Our system is fixable. We can support workers and avoid the heavy cost of mass removals.”

Conclusion

Latino immigrants fill a strong role in the U.S. economy by adding trillions to GDP and shaping how people buy goods. Businesses and policy makers must see the power of Latino communities. Their influence helps keep the country growing and paves the way for a sound future.

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Fed Chair Powell Signals Caution as Stock Prices Hit Elevated Levels

Federal Reserve Chair Jerome Powell Flags High Stock Valuations

September 23, 2025 — Providence, Rhode Island

Powell speaks and shows concern. He points to asset prices that many now call high. After a meeting of the Fed’s open market committee, he talks with reporters. Markets face shifts in rates and growth. Each word sits close to the next, clear in its link.

Powell’s Remarks on Financial Conditions and Market Valuations

Powell tests the market. He checks overall financial conditions. He asks if each policy moves conditions as he wishes. His words follow a simple link:

"We do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we’re trying to achieve."

He adds that many measures show stock prices at high levels:

“But you’re right, by many measures, for example, equity prices are fairly highly valued."

Each word ties closely to the next to keep meaning clear.

Implications for Investors and Market Watchers

Powell’s tone stays cautious. His words signal that while hope shows in the market, stock prices may not mirror the real economy. High prices might push volatility and risk if change comes fast.

Investors and those who watch markets may see his phrase as a sign. Policymakers keep all links in check, watching market shifts closely.

Context: The Fed’s Balance Between Growth and Stability

The Fed must keep jobs up and prices under watch. Powell’s view shows the task: support growth by careful steps while stopping risk from rising. Each policy word connects closely to another—keeping ideas tight and clear. Market watchers sit close to Fed words to catch hints on moves in rates or other tools.

Summary of Key Points

  • Fed Chair Powell notes that many stock prices appear “fairly highly valued” by several counts.
  • The Fed checks all parts of financial conditions when it tests the impact of its actions.
  • High stock prices may bring risk if the market shifts quickly.
  • Powell’s clear words show the Fed’s work to keep markets in balance while aiding growth.

Investors and analysts, keep your ears near Fed talks. Each new word may help shape how markets move in the days to come.

This is a developing story. Please stay tuned for updates.

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OECD Upgrades Growth Forecasts: U.S. Economy Shows Resilience Amid Tariff Challenges

OECD Raises U.S. and Global Economic Growth Forecasts Amid Stronger-Than-Expected Performance

The OECD has raised its economic growth numbers for the U.S. and for world markets. It sees strong work by key markets in early 2025. This change shows a more positive view than before. Ongoing trade disputes and higher tariffs still add strain.

Stronger Global Growth Forecasts

In its report on Tuesday, the OECD raised its global GDP growth stake to 3.2% for 2025. This is more than the 2.9% listed in June. The group now expects a slight dip next year, keeping a 2.9% rate for 2026. For context, global growth hit 3.3% in 2024. The report links this rise to improved work in many world markets. The OECD said that growth stayed strong through early 2025. It pointed to steady industrial work and active trade, even as political issues stay.

U.S. Growth Outlook Improved

U.S. growth forecasts also went up. The OECD now sees a 1.8% rise in U.S. GDP for 2025, up from 1.6% in June. Still, this is lower than 2024’s 2.8% rate. The rate for 2026 is set at 1.5%.

The growth boost comes from:
• Big investments in AI tech
• Support from sound fiscal plans
• Steady work by consumers and workers

Trade and Tariff Impacts Still Loom

The report warns of many risks. New tariffs, which started in August 2025, have not shown all their effects. The U.S. set high fees, with an average of 19.5%, a rate not seen since 1933. These tariffs hit many imports, with some fees at 50%.

The OECD noted that companies have cut costs by lowering profits. Still, these rising fees now affect:
• What consumers pay
• Company buy decisions
• Worker job conditions

In several regions, labor trends show softer work markets. Unemployment is up and job offers fall. Unclear trade policies also slow down investments and trade flows.

Inflation and Market Risks

The organization now sees headline inflation in G20 nations at 3.4% for 2025. This is a small drop from 3.6% in June. In the U.S., the inflation rate was trimmed to 2.7% from 3.2%.

But risks stay that might change these numbers:
• More tariff hikes may come
• Rising price pressures might appear
• Some nations face hard fiscal times
• Financial markets, including crypto links, may waver

Potential Upsides

Two opportunities may push growth even further:
• Fewer trade limits could clear up uncertainties and boost trade
• Faster AI tech work may add to productivity and new ideas

Summary

The OECD’s new view shows a strong start in global markets during early 2025. Emerging markets and tech investments in the U.S. have worked well. Trade problems and tariffs still pose risks. Yet, easing limits and rapid tech work may help keep growth steady in the years to come.

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Fed Cuts Interest Rates, But Mortgage Costs Soar: Unpacking the Disconnect in the Bond Market

The Fed Cuts Interest Rate, but Mortgage Costs Climb Amid Rising Long-Term Yields

The Fed cuts its rate in a bold step. Consumers still see steep mortgage costs. Short-term loans drop in cost. Long-term U.S. Treasury yields move higher. Mortgage rates follow these yields. The market does not work as many expected.

Fed’s Rate Cut and Market Reaction

On Wednesday, the Fed drops its lending rate by one quarter-point. The target now sits at 4.00%–4.25%. This is the first cut in 2025. Fed Chair Jerome Powell explains the move as a risk management step. Stock buyers cheer the cut and push equities to high marks. Bond traders watch long-term yields rise after a small drop. They doubt the shift in Fed policy.

Treasury Yields on the Rise

  • The 10-year Treasury yield hits 4.145%. It fell below 4% for a short time before climbing again.
  • The 30-year Treasury yield, linked to mortgages, moves to about 4.76%. It had been near a low of 4.604%.

Peter Boockvar, Chief Investment Officer at One Point BFG Wealth Partners, says bond traders do not favor rate cuts when inflation stays high. They sell long-term bonds. This drop in price makes yields go up. It shows the simple bond rule: low price ends up with high yield.

Inflation Concerns and Economic Outlook

The Fed’s new outlook shows faster inflation in 2026. This news makes some worry that softer policy may miss the chance to check price rises. Even though the Fed has cut rates several times since early 2024, the 10-year yield stays near its old level. Weak job data led some to hope for a focus on new jobs. But bond buyers see high long-term yields as a sign to stay cautious. Inflation still runs above the Fed’s 2% aim.

Impact on Mortgages and the Housing Market

Higher Treasury yields push mortgage rates up. Right after the Fed spoke, mortgage rates climbed. This rise wipes out gains seen when rates hit a three-year low. Homebuilder Lennar notes the tough scene. The Miami firm missed its revenue mark for Q3. It warned that high interest costs slowed deliveries.

The Bigger Picture for Investors

Chris Rupkey, Chief Economist at FWDBONDS, points to a long-term view in the bond market. Investors watch for hints on future rate moves and more cuts. Boockvar reminds us that U.S. Treasury yields feel the global mood. Other nations see higher rates, which adds to the bond market mix.

A Caution on Yield Movements

Lower long-term yields can point to fear of a recession. In this case, higher long-term yields may hint at stronger jobs and lower unemployment claims. Rupkey notes that a drop in yields is not always a sign of good news. Often, it comes with economic slowdowns and job losses.
"The bond market tends to focus on very bad news — not just bad news… but really grim news," Rupkey comments. He shows that the market sends mixed signals when it comes to the economy.

In summary, the Fed cut rates to support the market amid weak job hints. Yet, long-term bond yields push mortgage costs higher. This twist adds caution for both buyers and lenders. The housing sector may feel the change as banks adjust to the new market mood.

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Steve Bannon Proposes Bold Leadership Move: Can Scott Bessent Lead Both Treasury and the Fed?

Steve Bannon Proposes Dual Role for Scott Bessent as Treasury Secretary and Federal Reserve Chair

Steve Bannon, a close White House aide and former chief strategist under President Donald Trump, has set out a new idea. He wants Scott Bessent to serve as both the U.S. Treasury Secretary and the head of the Federal Reserve at the same time. This idea was raised during a podcast chat with Sean Spicer, who worked as President Trump’s press secretary during his first term.

Bannon’s Unusual Idea

Bannon wants Bessent to keep his current job at the Treasury while also leading the Federal Reserve for a short period. On a podcast scheduled for 6 p.m. Friday on YouTube, Bannon said:

“I am a strong believer that on a temporary basis, Scott Bessent should be both the leader of the Federal Reserve and the Treasury secretary, and then step down from Treasury after the midterm elections to fully take over the Fed.”

No modern leader has ever held both roles at once. In the past, before the Banking Act of 1935 set up how the Fed works today, the Treasury Secretary held a seat on the Fed’s Board of Governors by default. But having one person head both key financial bodies is new and untested today.

Reaction from the White House

Even though Bannon has some sway in parts of the administration, the White House did not accept the idea. A spokesperson said:

“Such an arrangement is not being and has never been considered by the White House.”

This statement makes clear that officials have no plan to give Bessent both roles.

Context on Scott Bessent and Fed Leadership

Scott Bessent is now the U.S. Treasury Secretary. He also plays a part in finding a new leader for the Federal Reserve as Jerome Powell’s term ends in May 2026. Reports note that about 11 candidates are being examined for the Fed Chair role. Bessent was once mentioned as a possible candidate, but he has shown that he is happy in his current job at the Treasury.

The top job at the Federal Reserve is very important. The person in charge sets the rules for money and credit, which affect growth, prices, and jobs. Jerome Powell has faced criticism from former President Trump over how the Fed handles interest rates.

Historical Note and Examples

There is no current case where one person runs both the Treasury and the Fed at the same time. Janet Yellen once led the Fed and later became Treasury Secretary, but she did so in different periods. Bannon’s plan would bring both roles together at once.

Summary

  • Steve Bannon suggests that Treasury Secretary Scott Bessent should hold both Treasury and Federal Reserve roles temporarily.
  • The White House quickly dismisses this plan.
  • No recent example shows one person in charge of both agencies at once.
  • Bessent helps with the Fed Chair search, yet he focuses on his Treasury work.
  • Jerome Powell’s term as Fed Chair ends in May 2026 amid high political and economic scrutiny.

Bannon’s idea is unlikely to move forward, but it adds to the talk about who will lead the Federal Reserve and guide U.S. economic policy as the nation gets closer to the midterm elections.

Stay tuned to CNBC and other trusted financial news sources for updates on the Fed Chair search and U.S. economic leadership.

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Germany’s Economic Revival: Experts Remain Skeptical Amid Sluggish Growth and Spending Delays

Germany’s Role as Europe’s Growth Driver Under Scrutiny by Economists

Germany sits as one of Europe’s main economic powers. Economists now question its ability to spark growth for the entire continent. Earlier this year, experts focused on Germany with hope tied to a strong economic bounce. This rebound was expected to lift the euro zone and Germany alike. New data and expert views now show that these hopes might come too soon.

High Hopes Amidst Policy Shifts

The surge of hope came with major policy moves. The German government changed its debt brake rule. This rule once kept the federal debt in strict limits. New rules let some defense and security spending go over the limit. Germany also started a €500 billion ($592 billion) fund for roads, energy systems, and climate plans. These steps aimed to push up the slow economic pace.

These moves were seen as a chance to turn around weak growth. After years of annual declines in 2023 and 2024, growth was expected to pick up in 2025. The latest data shows that Germany’s GDP barely rose by 0.3% in the first quarter of 2025 before it dropped by 0.3% in the second quarter.

Euro Zone Growth Remains Tepid

The rest of the euro zone seems to share Germany’s struggles. The region’s GDP grew by 0.6% in the first quarter of 2025, then slowed to 0.1% later. Martins Kazaks from the European Central Bank said this month that Germany plays a key role in the euro zone. Still, many experts now doubt the speed and size of its impact.

Spending Delays and Economic Impact

Holger Schmieding at Berenberg noted a rise in defense orders and new road and energy works. Yet, these sums have not come through in the nation’s output data. He said, “The actual spending moves slower than many of the more upbeat voices had thought. In Germany, it takes time to spend money.”

Franziska Palmas at Capital Economics saw more challenges below the surface of the new spending plan. She noted that, aside from more money on defense and roads, the government also uses extra funds for:
• Cuts in electricity tax for businesses
• Higher spending in pensions, healthcare, and social care driven by the aging population

Palmas made clear that while lowering taxes may spur some economic action, more spending on healthcare and pensions will mainly cover rising costs, not boost economic growth.

Modest Growth Expectations for 2026

Big German economic groups now predict a growth just above 1% for Germany in 2026. The European Central Bank sees the euro zone growing around 1% too. Schmieding of Berenberg thinks that Germany’s new spending will add about 0.3 percentage points to its growth. This should raise the euro zone figures by about 0.1 percentage point. Palmas expects a similar effect where Germany might lift euro zone growth by about 0.2 percentage points.

Other factors shape the euro zone’s growth. Recent cuts in interest rates by the ECB and strong performance in countries like Spain, which benefit from more immigration and jobs, help. Yet, factors like U.S. tariffs and tighter spending plans in France may hold back progress.

Broader Implications Beyond GDP

Even with a cautious view, many expect Germany’s slow but steady recovery to bring small gains to its neighbors. Schmieding noted, “Germany’s move from a short recession until mid-2024 to growth after late 2025 will give its neighbors a small boost. Germany remains an important trade partner.”

In summary, Germany’s bold fiscal changes have sparked hope, but the pace of spending and real growth numbers remain slow. Experts warn that 2026 may bring only a limited rise, amid a mix of spending challenges. Still, as Europe’s largest economy, Germany’s bounce-back will count for the overall health of the region.

For continuous updates on European and global economic developments, stay tuned to CNBC.

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White House Supports Fed’s Prudent Rate Cut: Kevin Hassett’s Insights on Economic Strategy

Federal Reserve’s Quarter-Point Rate Cut Seen as a ‘Smart Move’ by White House Economic Advisor

September 18, 2025 — The Fed cut its borrowing rate by 0.25%. The White House sees the move as wise. White House advisor Kevin Hassett told CNBC on Thursday that the decision fits a careful style of managing the economy.

A Steady and Careful Move

The FOMC voted to drop rates by 25 basis points. Most members agreed. Some in the administration wanted a deeper cut. New Fed Governor Stephen Miran, known from the Council of Economic Advisers, pressed for a 50 basis-point cut. But the vote came out 11 to 1, and his view did not win.

Hassett said that the cut builds slow progress. He said policymakers will watch each new piece of data before they act again. On CNBC’s Squawk Box, he said:

“Moving kind of slow and steady and heading towards a target, watch the data come in, that’s what prudent policy is.”

He added that although Miran wanted a deeper cut, the 0.25% drop marks a sound start if further cuts are needed.

In the White House and Market

President Donald Trump, who picked Miran for the Fed, has not yet shared his view on this choice. In the past, Trump has been critical of the Fed and has pressed for faster and larger cuts. He even called Fed Chair Jerome Powell “Too Late” for a slow pace in meeting economic needs.

The president has asked for cuts up to 3 percentage points. His view stands apart from the latest FOMC plans. Trump often points to the slow U.S. housing market and the rising federal debt, which now nears $37 trillion.

Economic Prospects: Growth, Price Rise, and a Fine-Tuned Plan

Hassett pointed out that the Fed faces a tough task. The U.S. economy grew above 3% in the third quarter. Such growth usually makes a rate cut less likely. Yet, price rise stays above the 2% goal, although it shows signs of slowing down.

With mixed signals, Hassett said it makes sense for Fed members to look at all the models and listen to many views. He asked, “What can we do in an economy that is growing and has inflation slowing but still above target?”

Hassett called the 0.25% cut a careful balance—a move that shows hope without taking a big risk in pushing up prices.

Looking Ahead: Fed Chair Hints

Some see Kevin Hassett as a strong choice to take over from Jerome Powell next year. His words show a preference for a plan built on clear data and many opinions on the economy.

Summary of Key Points:

  • The Fed dropped its main rate by 0.25% as a careful measure.
  • White House advisor Kevin Hassett called the move smart.
  • Fed Governor Stephen Miran had asked for a 0.50% drop, but most members disagreed.
  • President Trump has often pushed for deeper cuts, though he did not comment on this move.
  • The U.S. economy grew over 3% even as inflation stayed above 2%.
  • Hassett stressed the need to view multiple data points and ideas.
  • Hassett is seen as a likely candidate for Fed Chair next year.

For more news on economic changes and the Fed’s plans, follow CNBC’s live updates and expert chats.

Watch the full interview with Kevin Hassett on CNBC’s Squawk Box for more in-depth details.

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