Kevin Hassett on Tariffs, Inflation, and the Next Fed Chair

The Role and Effectiveness of Tariffs

• 🎯 Tariffs are viewed as an effective tool for President Trump, linked to national security and economic policy.
• 💡 The effectiveness of tariffs is debated, with arguments suggesting foreign governments bear the brunt rather than US consumers, especially when foreign entities have inelastic supply to the US market.
• 📈 While predictions of high inflation due to tariffs were made, current data shows a three-month moving average at an annual rate of around 1.5%, suggesting inflation has not significantly increased.

Economic Outlook and Inflation

• ⚠️ Despite promising recent data, there's a call for more months of data to confirm that inflation has been controlled.
• 💰 A study suggests that 96 cents of every tariff dollar is paid for by the American consumer, a point raised by figures like Christine Lagarde and Ken Griffin.
• ✅ Hassett counters that real wages are up under President Trump, even when accounting for tariffs, indicating that wages are rising faster than the cost of goods.

The Search for the Next Fed Chair

• 🔑 The discussion touches on the ongoing search for the next Federal Reserve chair, with President Trump reportedly narrowing down the choices.
• 🧠 Hassett suggests that the economy is currently running