CNBC interviews White House NEC Director Kevin Hassett on geopolitics, inflation, oil, and the Federal Reserve. Hassett argues markets are shrugging off the conflict because the administration is keeping investors informed, while strong earnings, wage gains, tax cuts, and U.S. energy dominance support the economy.
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In this CNBC interview, Kevin Hassett frames the market’s resilience during the latest Middle East conflict as a function of clearer communication from President Trump and what he says is improving progress in negotiations. He argues that the president’s weekend comments suggested talks are resuming and that investors are responding to a reduced uncertainty premium. Hassett says the underlying economy is strong: he points to two consecutive earnings seasons with upside surprises, wage strength, tax relief from the “Big, Beautiful Bill,” and declining food prices as evidence that the administration’s supply-side policies are working. He also stresses that the U.S. …
Tactically, the setup is crude-sensitive: any fresh de-escalation signal could keep the relief trade intact, while a breakdown in talks would quickly revive inflation and rates anxiety. The immediate risk is headline-driven volatility rather than a clean fundamental repricing.
Over the next few weeks to months, the base case in Hassett’s framing is lower oil and gradually cooler inflation as supply responds and geopolitical risk fades. That view holds only if talks continue, production adjusts, and the next data prints don’t reaccelerate.
Structurally, Hassett argues the regime is shifting toward U.S. energy dominance and supply-side disinflation, which would make the economy less vulnerable to external shocks. If that persists, oil shocks matter less over time and inflation becomes more manageable than in prior cycles.
Markets made new highs because the conflict overhang was reduced and investors were kept informed about negotiations.
He attributes the resilience to presidential communication and resumed talks.
Two earnings seasons in a row have broadly surprised to the upside.
He uses earnings strength as evidence for a better domestic economy.
The administration’s policies are visible in profit data and wage data.
He cites the 'golden age' and says wages are benefiting.
What do you attribute the market's resilience and new highs to, despite all the geopolitical uncertainty?
Hassett says President Trump has been communicating progress with the American people, negotiations are moving forward, and Trump's truths have given a clear guide about progress being made toward resolution.
What underlying fundamentals explain the market strength?
Hassett points to two earnings seasons in a row surprising on the upside, the 'Golden Age' visible in profit and wage data, and tax breaks from the Big Beautiful Bill for workers.
Do you think $80 is the new normal for oil prices?
Hassett disagrees, arguing oil prices will go down due to massive US production, Middle East production coming online once the straits open, and Saudi excess capacity of 2 million barrels a day.
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