Fed Chair Front-Runner Says Economy Can Get Back To 1% Inflation

Core Insights - The last time the Consumer Price Index rose by less than 1% over 12 months without a pandemic was in July 2016 [1] - Kevin Hassett predicts a potential return to low inflation and strong economic growth similar to the late 2010s, with a target inflation rate of 1% and economic growth of 3% [2][3] - Achieving a 1% inflation rate would significantly benefit consumers, extending the time for prices to double from 24 years to approximately 72 years [2] Economic Outlook - A combination of 1% inflation and 3% economic growth is seen as possible but unlikely in the near term, as inflation has not been below the Federal Reserve's target of 2% since 2021 [3] - Most forecasters do not expect inflation to drop below 2% for several years, indicating a challenging economic environment ahead [5] Policy Implications - Hassett believes that the economic policies from the Trump administration could eventually lead to lower inflation rates [4] - Although Hassett is not the leading candidate to succeed Jerome Powell as Federal Reserve Chair, he remains favored in prediction markets [4]