White House economic advisor predicts that reaching an agreement will cause oil prices to fall, leading to a rate cut

White House economic adviser Kevin Hassett said on Sunday that the White House expects energy prices to fall once an agreement is reached with Iran, creating room for the Federal Reserve to cut interest rates.

Hassett reiterated that once a deal is reached, energy prices will plunge, giving the Fed plenty of space to take the right actions at lower interest rates. He added that he respects the Federal Reserve’s independence and praised the new chair, Wash.

Hassett acknowledged that inflation is currently being driven mainly by rising energy prices, and that recent data reports are indeed cause for concern. However, he noted that core CPI has barely changed, and once energy prices pull back, negative inflation could occur.