Hassett says Fed can curb inflation without hurting US economy

White House National Economic Council Director Kevin Hassett said the Federal Reserve could keep inflation under control without damaging the US economy, expressing confidence in the central bank's new leadership.

Speaking to Fox Business on Tuesday, October 13, Hassett said the income effect was expected to be strong around the turn of the year. He also suggested that a slowdown in inflation could give the Fed a reason to hold interest rates steady.

Hassett's remarks come amid continuing debate over the balance between controlling inflation and supporting economic growth. The Fed must weigh price pressures against the risk that tighter monetary policy could slow economic activity.

He also said markets had confidence in the new Fed chair, signalling optimism about the central bank's leadership.

In a separate part of the interview, Hassett expressed strong disappointment with the Congressional Budget Office (CBO), describing its estimates as indefensible. The CBO provides independent analysis of the budgetary and economic effects of proposed legislation.

Hassett's comments reflect the administration's focus on containing inflation while sustaining economic growth, although the Fed independently determines its monetary policy.