• Former White House economic advisor Kevin Hassett states inflation has cooled to the "mid twos" from nearly 4% in January
  • Real spending power for Americans has grown by approximately $1,200 in 2025 after previous losses
  • Despite positive indicators, public skepticism persists with 70% of Americans reporting higher grocery spending

Former National Economic Council Director Kevin Hassett stated that the trajectory for inflation in the U.S. is "really good," pointing to recent economic data that shows significant improvement from earlier this year. Speaking in an interview, Hassett noted the Consumer Price Index has declined substantially, with inflation now running in the "mid twos" compared to nearly 4% in January.

"The data shows real spending power for Americans has grown by approximately $1,200 in 2025," Hassett said, contrasting this with purchasing power losses during the previous administration. He acknowledged, however, that inflation needs to move closer to the Federal Reserve's 2% target to meet central bank objectives.

The economic backdrop includes several positive indicators, with GDP growth around 4% and both industrial production and capital spending approaching all-time highs. Yet the improvement comes amid a government shutdown that has left economists and policymakers without new official data, creating uncertainty in economic assessments.

On the contentious issue of recent tariffs, Hassett argued they resulted in only a "one-time level adjust" on prices, with minimal ongoing inflationary impact. He cited declining imported goods prices as evidence that foreign producers have absorbed some tariff costs rather than passing them fully to American consumers.

Despite the improving macroeconomic picture, public perception continues to lag behind the data. Approximately 70% of Americans report spending more on groceries than a year ago, with independent data showing year-over-year prices for key goods like beef and coffee still up double digits. This disconnect was reflected in recent election results, where voters who ranked the economy as their top issue favored Democrats—bucking historical trends of Republican advantage on economic credibility.

Hassett's comments come as the administration contends with ongoing affordability concerns, particularly in housing where interest rates remain elevated—up 4% over previous years. Officials have pointed to stabilizing mortgage costs and are reportedly considering policy proposals to improve housing affordability, including longer-term mortgages.

The current improvement follows a period of exceptionally high inflation that peaked near 9% during the previous administration, making the restoration of purchasing power a central economic and political challenge. Similar periods of post-inflation cooling in U.S. history have typically taken considerable time to restore public confidence, as seen after the inflationary surges of the 1970s and early 1980s.

Administration officials predict a continued gradual decline in inflation over the coming year, though they face persistent public skepticism fueled by everyday price pressures and the absence of current official statistics due to the government shutdown.