Kevin Hassett, Director of the White House National Economic Council, has acknowledged that inflation in the United States still requires serious attention, following September consumer price data that revealed renewed upward pressure. In a statement on Monday (October 19, 2026), Hassett noted that inflation—which had appeared to be coming under control over the previous three months—is now facing fresh challenges. This situation has increased uncertainty regarding the Federal Reserve’s monetary policy trajectory, even as the government strives to maintain price stability and economic growth.
According to the latest report, the U.S. Consumer Price Index (CPI) rose by 0.6% month-on-month in September, marking its fastest increase in five months. Meanwhile, core inflation—which excludes food and energy prices—climbed by 0.3%, surpassing market expectations. Hassett indicated that these developments warrant close monitoring to determine whether the rise in inflation is merely transitory or if it signals an end to the downward trend in prices. Nevertheless, some commodities, such as beef and eggs, have reportedly seen price declines.
Hassett also highlighted robust consumer activity in the United States, which could sustain inflationary pressure. He suggested that optimism regarding the economic outlook has encouraged Americans to increase their spending, keeping demand for goods and services high. This presents a challenge for the Federal Reserve: while strong consumption can bolster economic growth, it may also slow the progress toward bringing inflation down to the central bank’s 2% target.
Meanwhile, Federal Reserve Chair Kevin Warsh has yet to provide a clear signal regarding interest rate decisions for the upcoming meeting. Warsh previously reaffirmed the central bank’s commitment to maintaining price stability, without specifying the direction of future monetary policy. Hassett also expressed his respect for the Federal Reserve’s independence in determining the most appropriate policy course. Looking ahead, market participants are expected to continue monitoring inflation trends, consumer spending, and statements from Federal Reserve officials to gauge whether interest rates will be held steady or raised further.
Impact on the US Dollar (USD)
Hassett’s remarks tend to provide a positive sentiment for the US dollar, particularly because persistent high inflation could strengthen the case for the Federal Reserve to maintain a tight monetary policy.
There are two potential scenarios to consider:
- USD strengthening scenario: If inflation remains high and US consumer spending stays robust, the market may increase its expectations for further Federal Reserve interest rate hikes. Such conditions could drive up US bond yields and boost demand for the dollar.
- USD weakening scenario: If the rise in inflation for September proves to be merely temporary and subsequent data points to a slowdown, expectations for interest rate hikes could diminish, potentially leading to a correction in the dollar.
Hassett’s comments serve as a reminder that the United States' battle to curb inflation is not yet over. Although the market currently anticipates that the Federal Reserve may keep interest rates unchanged in October, persistent inflationary pressure could pave the way for further monetary tightening. This environment is likely to keep the US dollar strong in the short term, while simultaneously exerting downward pressure on global gold prices. (CP)