Hassett: Trump's $5,000 stimulus plan "can be achieved in a responsible fiscal manner," and if interest rates rise, "the president will have something to say."

The White House's chief economic advisor strongly supports the idea of a trillion-dollar direct subsidy, but the bipartisan reaction in Congress is lukewarm, and the market is focused on its fiscal and inflationary impacts.

Trump's proposal to send $5,000 checks to every adult American citizen has drawn widespread criticism amid a high fiscal deficit.

White House National Economic Council (NEC) Director Hassett endorsed the proposal on Thursday, calling it "a fiscally responsible proposal" and describing it as a "serious one." However, congressional Republican leaders generally reacted coldly, and analysts expressed reservations about the plan's feasibility.

Based on the current adult population size, the plan would bring in more than $1 trillion in new spending, while the U.S. federal debt burden is nearing its historical peak.

Hassett stated that a specific offset plan still needs to be "negotiated with Congress," and said that the path forward includes bypassing minority obstruction votes in both the House and Senate through a budget reconciliation process.

Regarding inflation and monetary policy, Hassett also hinted that if the Federal Reserve takes significant interest rate hikes next week, "the president will have something to say," a statement that has drawn market attention to the future of the relationship between the White House and the Federal Reserve.

Analysts: Fiscal costs and inflationary pressures make it difficult for the proposal to be implemented.

Wall Street generally has doubts about the feasibility of the proposal. According to Bloomberg, Evercore ISI analysts stated bluntly in a report on Friday, "Trump's $5,000 universal checks plan, conditional on a Republican victory in the midterm elections, is simply not feasible in Congress due to its enormous fiscal costs and inflationary implications."

Congressional Republican leaders also responded with restraint to the proposal. Analysts point out that given the current limited fiscal space and lingering inflationary pressures, the over $1 trillion direct spending plan faces substantial resistance from within the party.

Hassett attempted to downplay concerns about fiscal discipline, emphasizing that U.S. economic growth and wealth accumulation provided the basis for returning the dividends, but did not elaborate on specific financing arrangements.

He stated that the budget reconciliation process is one of the potential legislative paths, a mechanism that allows the majority party in Congress to advance fiscal bills without the support of the minority party.

Inflation data is heating up, and the White House is signaling the Federal Reserve's next move.

On monetary policy, Hassett acknowledged on Friday that the August Consumer Price Index (CPI) showed an acceleration in inflation, but emphasized that the three-month rolling trend was still slowing down, in an attempt to cool market sentiment.

When asked whether the Federal Reserve might respond with a significant rate hike at its meeting next week, Hassett's words were meaningful: "I guess if the Fed takes significant action, the president will have something to say." This statement may be a signal of potential pressure from the White House on the Fed's independence.

Currently, investors are closely watching the Federal Reserve's interest rate decision next week, with fluctuating inflation data and White House policy statements contributing to market uncertainty.

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