The United States National Economic Council Director Kevin Hassett expressed his support for the independence of the Federal Reserve during an interview with CNBC. President Trump is still in the process of selecting the successor to Jerome Powell as the chair of the Federal Reserve, which has now entered its final stages.
Jerome Powell’s second term is coming to an end, and Hassett is one of the five final candidates for the position. In the interview, Hassett emphasized the importance of the candidate’s ability to reach consensus, stating that the independence of the Federal Reserve is crucial, and that the voices of the other members of the Federal Open Market Committee are equally important. Therefore, the decision-making process for interest rate adjustments must be based on consensus reached through facts and data.
In recent months, Hassett has been viewed as a top contender to succeed Powell as the chair of the Federal Reserve. However, President Trump’s statements last week indicated that former Federal Reserve Governor Kevin Warsh has also emerged as a leading candidate.
Concerns have been raised about Hassett’s close relationship with Trump, with some fearing that he may simply follow Trump’s directives rather than working towards setting interest rates that align with the dual mandate of the Federal Reserve to maintain price stability and full employment.
Addressing these concerns in his CNBC interview, Hassett stated that his relationship with Trump should not have a negative impact on him. He affirmed, “I am indeed a close friend of the President, and we work well together. Some may think that disqualifies me for the position, but the President does not share that view.”
Powell himself was appointed by Trump, but his views have often clashed with those of the President. Trump has consistently pushed for significant interest rate cuts, despite the Federal Open Market Committee (FOMC) having approved three consecutive rate cuts totaling 0.75 percentage points since September, which still did not meet Trump’s expectations. Federal Reserve Governor Stephen Miran, also appointed by Trump, took office in September and has voted against rate cuts three times, supporting only a 0.5 percentage point cut.
President Trump advocates for the Federal Reserve to consult him on interest rate decisions, while Hassett emphasizes the need for consensus within the Federal Reserve. He emphasized, “Fundamentally, interest rate adjustments must be based on consensus reached through facts and data. If mistakes are made, they need to be explained and rectified; that’s how things progress.”
He further added, “The President is an experienced economic observer, and if his views are valid, I believe others will recognize that.”
The Treasury Secretary responsible for this selection process, Scott Bessent, stated on Fox Business Channel on Tuesday morning that the final decision may be announced in early January.
(This article was adapted from CNBC’s report)