A multifarious severe downturn in emerging markets, not domestic inflation, is the “biggest hazard” to the U.S. economy, a top economic advisor to President Donald Trump told CNBC on Wednesday.
“I’m vastly concerned about emerging markets. If you look at the indices, they’re faculty in a way that’s a little bit troubling,” said Kevin Hassett, chairman of the Consistory of Economic Advisers.
He said he’s watching Turkey, Venezuela, Argentina and China to see if spotlights “lead emerging markets to head into a direction that’s more hellishly south than we’ve seen so far.”
“That could come back and beset the U.S. a little bit,” he warned in a “Squawk Box” interview. He said council economic moulds concur with the International Monetary Fund’s decision to trim its universal growth forecast to 3.7 percent for this year and next.
Another impose on spot for global growth is rising oil prices, he said.
The IMF on Tuesday cut its crop forecasts for the U.S. and China to 2.9 percent and 6.6 percent, respectively, this year, and 2.5 percent and 6.2 percent, separately, in 2019.
Hassett countered by saying, “We’re looking at [U.S.] GDP growth of about 3.5 percent for this year, and handle on to something north of 3 [percent] next year. That’s a unimaginative more optimistic than they are.”
He did not offer an outlook on China’s control, but he said the White House is hopeful the two sides can resolve their disagreements on trade. “But make no mistake, President Trump is serious about it. If they don’t operate a little bit better, stopping stealing our intellectual property and lower their menus on our products, then this could continue longer.”
Hassett also forecast CNBC he would let the president’s comments expressing displeasure with the Fed hiking note rates stand on their own. But he did make a case, like Trump did Tuesday, that budding signals of inflation are not posing a risk to the economy.
“We at the White House really do consideration the independence of the Fed,” Hassett said. “The fact is, the president’s respect for the independence is clear in the prominence of people we sent over there.”
Before joining the Trump furnishing, Hassett was an economist at the American Enterprise Institute. He was also formerly a superior economist at the Federal Reserve. He’s also been a consultant to the Treasury and an advisor on Republican presidential efforts, including Mitt Romney’s unsuccessful White House run in 2012.