White House economic adviser downplays market risks from AI safety warnings

White House National Economic Council Director Kevin Hassett dismissed concerns Sunday that recent warnings by technology executives over artificial intelligence (AI) risks would trigger market turmoil.

"I don't expect that that's what's going to happen," Hassett told US broadcaster CNN, describing an essay published by Anthropic Chief Executive Officer Dario Amodei as a "very thoughtful letter" outlining the need to pace developments while ensuring firms demonstrate their systems are safe.

Hassett endorsed Amodei's call to establish independent observers embedded in firms during model training, comparing the proposed inspectors to bank supervisors. While acknowledging risks such as autonomous agents compromising cybersecurity, he cautioned that the "far bigger risk is that a malevolent actor has access to an AI that's better than the one we have that can protect us," specifically warning against foreign development of biological weapons.

US President Donald Trump opposed slowing down the domestic AI industry, arguing Sunday that maintaining a technological advantage over China remains critical for global leadership.

While acknowledging that authorities "can put guardrails" on technological systems, Trump maintained that his primary objective centers on preserving America's edge, because "whoever wins AI wins."

Federal Reserve interest rate decision

Turning to monetary policy, Hassett argued that the Federal Reserve has no compelling reason to raise interest rates despite recent data showing that annual inflation rose 3.4% in August.

"President Trump and I actually think that there isn't a reason right now to raise rates," Hassett said, noting that while oil price surges from hostilities in the Gulf pushed annualized headline numbers higher earlier this year, recent figures show annualized inflation running at “just about 1%.”

Citing historical precedents under former Federal Reserve Chairman Alan Greenspan, Hassett maintained that central bank officials should leave policy unchanged to protect institutional independence ahead of the November midterm elections.

Hassett affirmed that the administration would support Federal Reserve Chairman Kevin Warsh regardless of the outcome while playing down Trump's threats to halt trade with deficit partners if the Fed does not lower interest rates, adding: “I don't expect the trade's going to go to zero.”

Trump confirmed Sunday that he will halt commerce with several trading partners running surpluses against Washington if the Fed does not reduce interest rates.

"Oh yeah, I'm going to do that with some nations," he told reporters upon concluding his visit to Ireland. "I'll have no choice. We don't want to have deficits with nations. We want to have surpluses, or at least break even," he said.

Hassett's remarks came after Trump said the US "should be paying the lowest interest rate in the world" because it “is so strong.”

The next Federal Reserve interest rate decision is scheduled for Wednesday, as the current benchmark rate sits in a target range of 3.50% to 3.75%.