Fed chief contender Hassett says Trump can offer central bank advice but won’t set its action
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US White House economic adviser Kevin Hassett (above) sought to suggest that US President Donald Trump is one of many experts who can fairly be consulted, even if he ultimately offers only advice.
PHOTO: REUTERS
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WASHINGTON – National Economic Council head Kevin Hassett said he would consider US President Donald Trump’s policy opinions if picked to lead the Federal Reserve, but that the central bank’s interest rate decisions would stay independent.
The President “has very strong and well-founded views about what we ought to do”, said Mr Hassett, Mr Trump’s top economic adviser at the White House, on Dec 14 on CBS’ Face The Nation.
“But in the end, the job of the Fed is to be independent and to work with the group of people that are on the Board of Governors, the FOMC (Federal Open Market Committee), to drive a group consensus on where interest rates should be,” he said.
Mr Hassett was responding to questions about Mr Trump’s comments on Dec 12 that he should be able to make recommendations on rates set by the Fed.
Mr Trump and senior advisers have pressed Fed chairman Jerome Powell to lower rates for months – while also weighing his choice to replace Mr Powell, whose term at the helm of the Fed ends in May 2026.
Mr Hassett is seen as the front runner for the post, though Mr Trump also met former Federal Reserve governor Kevin Warsh last week.
The President named the two men as his top choices
“We’ll soon have a good head of the Fed who’s going to want to see interest rates go down,” the President said during a holiday reception at the White House on Dec 14. “But we’re fighting through higher interest rates.”
Mr Hassett sought to suggest on Dec 14 that Mr Trump is one of many experts who can fairly be consulted, even if he ultimately offers only advice.
Even as Fed chairman, “I would be happy to talk with the President every day until both of us are dead because it’s so much fun to talk” with him, Mr Hassett said.
He rebuffed the notion that the President’s voice would have equal weight to voting members of the FOMC, however, saying that the policymakers would be free to reject his opinion and “vote in a different way”.
“No, no, he would have no weight,” Mr Hassett said. “It’s just, his opinion matters if it’s good, if it’s based on data.” BLOOMBERG
