A more severe downturn in emerging markets is the “biggest risk” to the U.S. economy, not domestic inflation, a top economic advisor to President Donald Trump told CNBC on Wednesday.
Kevin Hassett, chairman of the Council of Economic Advisers, said he’s watching Turkey, Venezuela, Argentina, and China to see if stresses “lead emerging markets to head into a direction that’s more extremely south than we’ve seen so far.”
“That could come back and haunt the U.S. a little bit,” he warned in a “Squawk Box” interview.
Before joining the Trump administration, Hassett was an economist at the American Enterprise Institute. He was also formerly a senior economist at the Federal Reserve.
On Wednesday, Hassett told CNBC he would let the president’s comments expressing displeasure with the Fed hiking interest rates stand on their own. But he did make a case, like Trump did Tuesday, that budding signs of inflation are not posing a risk to the economy. He also added the president respects the independence of the central bank.
Hassett has also been a consultant to the Treasury and an advisor on Republican presidential campaigns, including Mitt Romney’s unsuccessful White House run in 2012.
Another trouble spot that Hassett is monitoring is rising oil prices. On CNBC Wednesday, he said they pose “risks to the outlook” for global economic growth.