Hassett says Fed independence is ‘really important’ and chair candidates shouldn’t be disqualified for being Trump’s friend
National Economic Council Director Kevin Hassett, a finalist for the Federal Reserve chairman post, showed support for central bank independence on Tuesday.
With President Donald Trump apparently in the final days of the process of selecting Jerome Powell’s successor at the Fed, Hassett declined to directly address his own candidacy in the CNBC interview but said consensus-building is an important part of the job.
“The independence of the Federal Reserve is really important, and so are other people’s voices.” [Federal Open Market Committee]”These are also important,” he said. “Therefore, the way to direct interest rate movements is through consensus based on facts and data.”
Before last week, Hassett was seen as the leading candidate to replace Powell, who is nearing the end of his second term as central bank governor. But Trump said last week that former Gov. Kevin Warsh also appeared before the group after an interview between the two last Wednesday.
There has been some backlash against Hassett in recent days. Sources told CNBC that the president’s advisers are concerned that Hassett will be perceived as too close to Trump and will follow his orders rather than try to set interest rates in line with the Fed’s dual mandate of stable prices and full employment.
However, Hassett said his relationship with Trump should not be used against him.
“The idea that someone is unsuited for the job because they are a close friend who has worked well with the president is something that I think the president rejects,” he said.
Despite appointing Powell, Trump constantly criticized the Fed chairman.
Trump has demanded aggressive rate cuts that have been unsatisfactory, even though the FOMC has approved three consecutive three-percentage-point rate cuts since September. Gov. Stephen Miran, whom Trump appointed to the post in September, voted against each of those cuts in favor of half-point cuts.
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