Hassett Says CPI Data Shows Inflation Needs ‘Some Work’

White House National Economic Council Director Kevin Hassett said prices have been falling for items such as beef and eggs, though consumer price data for September shows overall inflation continues to need policy attention.

“If you look at the previous three months, it looked like inflation was completely under control, and now it looks like it’s sort of back needing some work,” Hassett told CNBC Monday.

Data last week showed consumer prices advanced in September at the fastest pace in five months and a gauge of underlying price pressures rose by more than expected. The consumer price index rose 0.6% from a month earlier while a key measure of underlying price pressures, which excludes food and energy, was up 0.3%.

“This is either a sort of break from the downtrend or a blip,” Hassett said in the interview.

Federal Reserve Chairman Kevin Warsh last week did nothing to dispel market expectations that the central bank will hold interest rates steady when it meets at the end of the month. In a moderated discussion at the International Monetary Fund’s annual meetings, Warsh made no remarks on monetary policy or his outlook for the US economy, apart from reiterating that the Fed will deliver price stability.

Hassett said he respects the central bank’s independence and said Warsh will “do what he thinks is the right thing.”

“People are really euphoric about how well the economy is doing, and they’re spending more. And of course, that’s the kind of thing the Fed needs to pay attention to,” Hassett said.