Kevin Hassett, chairman of the U.S. White House National Economic Council (NEC), said that if the United States and Iran reach an agreement, energy prices will plummet, creating room for the Federal Reserve (Fed) to cut interest rates. Hassett reiterated, "If an agreement is reached, I once again expect energy prices to plummet. If that happens, there will be ample room for the Fed to take appropriate action and lower interest rates." He emphasized his respect for the Fed's independence and highly praised Kevin Warsh, who was sworn in as Fed chairman on the 23rd (local time). While the soaring fuel prices in the U.S. due to Iran's blockade of the Strait of Hormuz are increasing political pressure on President Donald Trump and the Republican Party for the November midterm elections, Hassett diagnosed that accelerating inflation is mainly triggered by energy prices. He added, "Looking at the data released several times recently, energy prices are certainly concerning, but core inflation has hardly changed. If energy prices fall, negative inflation could even occur."
