Kevin Hassett, Director of the National Economic Council, addressed concerns about rising fuel prices on Sunday. A possible agreement with Iran to reopen the Strait of Hormuz offered a sliver of hope. Hassett expressed optimism, stating, “We expect energy prices to plummet with any deal.” This was shared during a conversation with Jackie DeAngelis on Fox News.
Hassett’s statements coincided with Kevin Warsh’s recent appointment as the new Federal Reserve Chair. Warsh replaces Jerome Powell after a long-standing struggle between President Donald Trump and his predecessor. Hassett emphasized Trump’s commitment to an independent Federal Reserve, voicing confidence in Warsh’s capability to make data-driven decisions.
I respect the independence of the Fed and the intellect of Kevin Warsh, and I’m sure he’ll approach matters based on the data.
In related developments, President Trump, alongside Secretary of State Marco Rubio, hinted at a resolution to the protracted conflict. On Saturday, Trump mentioned substantial progress in negotiations with Iran and allied nations. He reported a productive call with key global leaders.
Reopening the Strait of Hormuz is central to the tentative agreement. Since the conflict began, this strategic waterway has faced significant disruptions. Trump assured that the final discussions are underway, with an announcement expected soon.
Hassett also highlighted the potential for increased oil reserves from nearby nations like Saudi Arabia and the UAE. The reopening of the strait might enable these countries to ramp up oil production. “As oil refineries prepare to return to full capacity, a substantial increase in oil supply could follow,” Hassett explained.
He noted that there are signs of hesitation in the spot market, indicating expectations of a significant price drop soon.
Beyond fuel costs, Hassett indicated positive trends in broader inflation relief. This includes Trump’s initiatives to lower prescription drug costs under TrumpRx and relaxed environmental regulations aiming to reduce expenses.