White House says increased productivity means Fed can cut rates

April 6 (Reuters) - ‌White ​House ​economic adviser Kevin Hassett told CNBC on ‌Monday that he believes a "supply ⁠shock" in the U.S. economy ‌caused by capital ‌spending and higher productivity from artificial intelligence will allow ​the Federal Reserve to lower interest rates.

"If ⁠we have a supply shock like we're ​seeing because of all this capital spending ... AI increasing ​productivity, it ‌puts downward, downward pressure on inflation, and that ⁠should take the pressure off the Fed. They ⁠should be able to lower rates," ​Hassett said.

Hassett said he expects interest rates will be lowered if ‌Kevin Warsh, President Donald Trump's nominee to become ‌Federal Reserve chair, ⁠takes the ‌position.

(Reporting by ​Ryan Patrick Jones in Toronto; Editing by Katharine ‌Jackson)

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