White House economic advisor Kevin Hassett sparked immediate controversy Monday by declaring that consumer economic pain resulting from the Iran conflict is "the last of our concerns right now"—a remarkably candid admission that highlights the growing disconnect between foreign policy priorities and Main Street economic reality.
The comments came during a contentious press briefing as diesel prices crossed $5 per gallon and grocery costs showed renewed upward pressure. When pressed on inflation concerns, Hassett doubled down: "National security doesn't have a price tag. Americans understand that some sacrifices are necessary."
But do they? Consumer sentiment data suggests otherwise. The University of Michigan's latest survey shows confidence plunging to 58.2—the lowest reading since 2022—with inflation expectations jumping back above 4%. Households making under $75,000 annually report cutting back on essentials as food and fuel costs surge.
The political risk is obvious. The administration is effectively telling voters that their economic struggles take a back seat to military objectives in the Middle East. That's a tough sell when real wages have barely recovered from the 2021-2022 inflation shock and credit card delinquencies are rising.
Economists were quick to push back. Jason Furman, former chair of the Council of Economic Advisers, called the comments "economically illiterate and politically tone-deaf." He noted that energy shocks have historically triggered recessions—hardly something to dismiss as peripheral.
The market's reaction was swift. Treasury yields jumped 12 basis points as traders repriced inflation expectations. The dollar strengthened on expectations that the Fed will hold rates higher for longer. Equity futures dropped as investors factored in squeezed consumer spending.
The Hill reported that even Republican allies privately expressed concern about the messaging. One senator, speaking anonymously, said it "sounds like we don't care about people struggling to pay bills."
