Kevin Hassett is a well published Economist. He’s a growth policy advocate. His Wikipedia page demonstrates his publications and history.
We should (should we?) expect more of a coordinated effort between the U.S. Treasury (given Treasury Secretary Scott Bessent picked him) and the Federal Open Market Committee (FOMC) to boost the U.S. economy.
Will the FOMC lose it’s independence (slowly…)?
Implications for a hotter economy and inflation is likely bullish for precious metals, but to the extent that long end yields fear inflation and the curve bear steepens, other asset markets like equities could struggle.
With the massive amount of debt outstanding, the worst outcome is an uptick in longer-term inflation expectations. The market based pricing of longer-term inflation is the five-year/five-year inflation swap, which you can follow on the Federal Reserve Economic Data St. Louis website (the expectation of what the five-year inflation will be in five years from now).
One reason the FOMC has called inflation transitory is that the long-term expectation has remained relatively anchored in the post COVID inflation shock. The recent trend has been positive for asset markets.
Once Hassett is named (“officially”) and confirmed, watch this indicator to help determine if we need to be concerned about longer-term inflation.
Gold seems to be telling us we need to be concerned, but this indicator does not.
