Kevin Hassett, director of the White House National Economic Council, said prices for items such as beef and eggs have declined, but September US consumer price data show that the broader inflation problem still requires attention at the policy level.
Speaking in an interview with the media on Monday, Hassett said: "If you look at the previous three months of data, inflation seemed to be completely under control; but now it appears inflation has returned to a state where further efforts are needed to address it."
Data released last week showed that US consumer prices in September rose at the fastest pace in five months, and a gauge reflecting underlying price pressures also came in higher than expected. CPI rose 0.6% month over month; core CPI, excluding food and energy prices, rose 0.3% month over month.
Hassett said: "This may mean the downward trend in inflation has been interrupted, or it may just be a temporary fluctuation."
Last week, Federal Reserve Chair Kevin Warsh did not dispel market expectations that the Fed will keep interest rates unchanged at its meeting later this month. During a conversation event at the annual meetings of the International Monetary Fund (IMF), Warsh did not comment on monetary policy or the US economic outlook, and only reiterated that the Fed will achieve its goal of price stability.
Hassett said he respects the Fed's independence and said Warsh will "do what he believes is right."
Hassett also said: "People are very optimistic about the strong performance of the US economy, and consumer spending is also increasing. Of course, this is exactly the situation the Fed needs to pay attention to."
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