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Kevin Hassett, a prominent economic advisor and former chair of the White House Council of Economic Advisers, has suggested that a significant drop in U.S. inflation is imminent due to expected declines in gasoline prices. Hassett predicts that gasoline prices could realistically reach $3 per gallon, down from the current AAA National Average of $3.872 and the EIA average of $4.052. This potential decrease in gasoline prices could lead to a ~22-25% reduction, potentially impacting the overall Consumer Price Index (CPI), which recorded a 4.2% year-over-year inflation rate in May 2026. Historically, gasoline prices have shown volatility but have generally trended downward since peaking in August 2022.
Key Takeaways
- Hassett’s comments appear to suggest a potential decrease in crude oil demand, which could lower the likelihood of crude oil reaching a new all-time high.
- The market pricing for crude oil reaching a new all-time high by September 30 has remained relatively stable, with only minor fluctuations in recent days.
- The December 31 sub-market has seen an increase in YES probability, suggesting some market participants anticipate potential catalysts later in the year.
What to Watch
Markets will likely reflect gasoline price trends and their impact on crude oil demand. The actions of key figures like OPEC’s Secretary General and the Saudi Minister of Energy could provide further indications of market direction. Additionally, upcoming reports on global oil demand and geopolitical developments may influence the likelihood of crude oil reaching new highs by the end of the year. As the situation evolves, the pricing in related markets such as the US-Iran Ceasefire may also provide insights into broader energy market dynamics.
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Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.
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