White House National Economic Council Director Kevin Hassett recently publicly stated that if the United States reaches an agreement with Iran and the reopening of the Strait of Hormuz leads to a significant drop in international oil prices, it will substantially ease U.S. inflation pressures, thereby creating policy space for the Federal Reserve to restart interest rate cuts.

Hassett pointed out that recently, the U.S. CPI year-over-year rose to 3.8%, with core CPI reaching 2.8%, and that the inflation uptick is mainly driven by rising energy prices, while core inflation has not gone out of control. He expects that once geopolitical tensions ease and energy prices "plummet," overall inflation could even temporarily turn negative, at which point the Fed "will have ample room to take the right action and cut rates." He also emphasized respecting the independence of the Federal Reserve and expressed appreciation for new Chair Kevin Wirth.

This stance echoes the signals from Trump, who revealed that U.S.-Iran negotiations are "progressing in an orderly manner," aiming to inject market expectations of "oil prices falling—inflation cooling—rate cuts resuming." After the news broke, Brent crude oil briefly plunged over 5%, and U.S. Treasury futures rose slightly. However, the market remains cautious—some traders in the bond market are even betting that the Fed will delay easing to maintain its anti-inflation credibility. Whether a rate cut window will truly open in the short term still depends on whether oil prices can continue to decline, PCE inflation data substantively fall, and the Fed’s own policy judgment.

Overall, Hassett’s comments are more of a political signal to the White House to "pressure inflation and promote easing," and actual rate cuts will still depend on the Fed confirming that energy deflation is sustainable rather than a fleeting base effect.