White House National Economic Council Director Kevin Hassett: Fed Rate Cuts Expected This Year Due to Warsh Factors

Kevin Hassett, as a core economic advisor of the Trump administration, has previously discussed adjustments to monetary policy. By directly naming Warsh, he continues to push for a shift in Fed personnel and policy. Warsh is seen as a potential key figure in the Fed leadership, often holding pro-growth and market-supportive positions.

In terms of capital flows, the market is quickly reallocating funds from high-interest defensive assets to stocks, real estate, gold, and risk assets. Resources are accelerating from cash and short-term bonds into growth-sensitive areas, motivated by the expectation of rate cuts to alleviate fiscal deficit pressures and stimulate the economy, while also creating a favorable financial environment for the implementation of Trump administration policies.

Similar to the sustained pressure on the Fed during Trump's first term and historical coordination of monetary policy during presidential terms, the current U.S. macro policy is transitioning from independent Fed decision-making to a phase of administrative guidance and market expectation coordination.

This essentially represents a regulatory change: through key personnel signals, the pricing power is partially shifting from Fed data-driven to government-market expectation-driven. The mechanism lies in the influence of figures like Warsh accelerating the narrative of easing, prompting capital to reprice asset risk premiums and growth expectations in advance.

ABAB News · Cognitive Law

Personnel signals always price in rate cuts earlier than economic data. When the White House names one person, the market writes easing into valuations ahead of time. Ultimately, rates are determined by data, but they are first decided by those sitting at the table.