National Economic Council Director Kevin Hassett attempted to ease concerns over rising fuel costs on Sunday, as hopes of a deal with Iran to reopen the Strait of Hormuz linger on the horizon.
“We expect energy prices as soon as there’s a deal to plummet,” he told Fox News’ Jackie DeAngelis.
“And when that happens, then there’ll be a lot of room for the Fed to do the right thing and lower rates…”
Hassett’s remarks come shortly after Trump-nominated Kevin Warsh was sworn in as the new Federal Reserve chair — a shake-up to the institution that comes after a lengthy tug-of-war between the president and Warsh’s predecessor, Jerome Powell.
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Hassett insisted President Donald Trump had emphasized the need for an independent Fed and said he shared the sentiment himself.
“I respect the independence of the Fed and the intellect of Kevin Warsh, and I’m sure that he’ll work it out on a data-dependent way.”
Meanwhile, Trump and Secretary of State Marco Rubio have suggested an end to the months-long conflict could be drawing near.
Trump announced Saturday that an agreement had been “largely negotiated” with Iran and several allied nations following what he described as a “very good call” with key world leaders.
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He added that final aspects and details of the deal are “currently being discussed and will be announced shortly.”
Reopening the Strait of Hormuz, which has largely been disrupted since the start of the conflict, is a key provision of the tentative deal, Trump indicated.
Hassett additionally told DeAngelis that a swath of new reserves in nearby countries such as Saudi Arabia and the United Arab Emirates could go online once the strait reopens.
“As people are getting ready to get their oil refineries going back to full capacity and everything, then there’s just basically a gusher of oil that could come out,” he said.
“We’ve done a lot of careful modeling about how long it’s gonna take for things to get back to normal, and I could tell you that we’ve already seen signs that people are a little bit wary about buying oil on the spot market right now because they expect the price to drop a lot sometime soon, so that’s a very, very good sign.“
On the note of broader inflation, Hassett pointed to “great signs” that relief could be on the way, including a TrumpRx expansion to reduce prescription drug costs and a recent Oval Office event during which some government-imposed environmental regulations were loosened in an effort to bring down costs.