Christopher Phelan, an economic adviser to President Donald Trump, said in an interview with Breitbart News Washington Bureau Chief Matthew Boyle that the administration’s approach to reducing inflation is showing results, and that he sees “no reason to raise rates.”
Phelan acknowledged that “right now, inflation is a little bit higher than we would like,” but said it is “coming down.” Asked how to address inflation and change its trajectory, he pointed to Personal Consumption Expenditures (PCE) inflation, which remains above the Federal Reserve’s target but is, in his words, “improving.”
“I wouldn’t say a lot of it started under the Biden administration, almost all of it started under the Biden administration,” Phelan said.
Phelan said he prefers to average inflation data over several months rather than look at single readings, and he focuses on Core PCE, which strips out food and energy prices.
“I like to look at Core, which excludes food and energy. Not because food and energy doesn’t matter, it does. But, because it’s very volatile as well,” Phelan said, noting that Core PCE “is what the Fed looks at.”
“Core PCE… which is what the Fed looks at, over the last three months has been three percent. The three months before that it was 3.9 percent. So, what they’re currently doing now is working,” Phelan said. He also acknowledged that PCE inflation has run above the Fed’s target for roughly 65 straight months.
Asked whether Americans should expect rate cuts or rate hikes, Phelan said he sees no case for raising rates.
“There are always going to be people that criticize someone in my position for having suggestions to the Federal Reserve. I don’t see anything wrong with that. I think it’s perfectly fine for the President to have opinions and express them on what the Fed should do. This is not new, this has happened over the entire history of the Fed.”
Phelan repeated his read on the numbers: Core PCE inflation at three percent over the last three months, following 3.9 percent in the three months prior.
“We’re seeing inflation come down; I see no reason to raise rates,” Phelan said.
