Dismissing recession probability is a 'mistake,' former White House economist warns
Fed's favorite inflation gauge slightly improves in April, but Q1 GDP contracts
Former Trump Council of Economic Advisers Chairman Kevin Hassett argues consumers are as pessimistic as they were during the Great Recession.
Reacting to the Federal Reserve's preferred inflation gauge improving by 0.3% from March to April, former Trump Council of Economic Advisers Chairman Kevin Hassett signaled it's a "mistake" to start dismissing the possibility of a recession on "Cavuto: Coast to Coast" Friday.
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KEVIN HASSETT: I hope it's a positive development, but I'm very skeptical that [PCE's] not going to accelerate from here. You know, there was a weird blip with gasoline prices going down in April and they've more than recovered that ground in May. And the thing that I look at really is that the consumer is really pessimistic… And one way you can see that is the savings rate has dipped to below 5%, which is the lowest it's been since the September of the Lehmann crash.
Former Trump Council of Economic Advisers Chairman Kevin Hassett argued the slight improvement in April's PCE report is short-lived, saying dismissing the possibility of a recession is a "mistake" on "Cavuto: Coast to Coast" Friday, May 27, 2022. (iStock)
The bottom line is first quarter was negative. Second quarter right now, GDP has it at about 1%. If it comes in negative, then we're in a recession right now. And so I think dismissing that probability is a mistake.
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Former Trump Council of Economic Advisers Chairman Kevin Hassett argues consumers are as pessimistic as they were during the Great Recession.