Hassett: The independence of the Federal Reserve is very important and should not be disqualified just because the candidate is a friend of Trump

On Tuesday, one of the hot candidates for the position of Federal Reserve Chairman, National Economic Council Director Kevin Hassett, stated that supporting the independence of the central bank is crucial.

As U.S. President Trump has entered the final stages of selecting a successor to Federal Reserve Chairman Jerome Powell, Hassett avoided directly responding to questions about his candidacy during a media interview but emphasized the importance of building consensus in this role:

The independence of the Federal Reserve is really, really important, and the voices of other members of the Federal Open Market Committee (FOMC) are equally important. Therefore, the way to drive interest rate changes must be based on a consensus formed from facts and data.

Prior to last week, Hassett was seen as the strongest candidate to succeed Powell. However, Trump indicated last week that after his interview with former Federal Reserve Governor Kevin Warsh on Wednesday, Warsh has also emerged as one of the most competitive candidates.

On Tuesday, The Wall Street Journal reported that Trump is expected to interview Federal Reserve Governor Christopher Waller on Wednesday as part of the selection process for the Federal Reserve Chairman.

In recent days, some opposing voices have emerged regarding Hassett. Media reports cited sources saying that the president's advisors are concerned that the public may perceive Hassett as too closely aligned with Trump, potentially favoring the execution of the president's will rather than formulating interest rate policies based on the Federal Reserve's dual mandate of "stabilizing prices and achieving maximum employment."

In response, Hassett stated that his relationship with Trump should not be a disadvantage:

Just because someone has a close relationship with the president and has worked well with him does not mean he is unsuitable for this position; I believe this is a viewpoint that the president does not agree with.

Although Trump appointed Powell, he has been a persistent critic of the Federal Reserve Chairman.

Trump has consistently called for significant interest rate cuts, and even though the Federal Open Market Committee has cut rates three times since September, totaling 75 basis points, he remains dissatisfied. Stephen Miran, a Federal Reserve Governor appointed by Trump in September, voted against each of these rate cut decisions, advocating for a one-time cut of 50 basis points.

Trump has argued that the Federal Reserve should consult the president when making interest rate decisions.

Hassett reiterated the importance of building consensus within the Federal Reserve:

The way to drive interest rate changes is to form a consensus based on facts and data. If a mistake is made, we should explain the reasons and correct it so that progress can be made. Of course, the president is an experienced economic observer, and if he presents a good point, I believe others will recognize it as well.

Treasury Secretary Scott Bessent, who is leading the selection process, stated on Tuesday morning that a final decision is likely to be announced in early January next year.

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