Federal Reserve Chair: Hassett Confirms Independence from Trump’s Influence

In a recent development from Washington, a top contender for the role of Federal Reserve chair under President Donald Trump has stated that while he would convey the president’s views to Federal Reserve officials, these views would ultimately not dictate the Fed’s decisions on interest rates.

Kevin Hassett, interviewed on CBS News’ “Face the Nation” on Sunday, emphasized that he would maintain communication with Trump if appointed as Fed chair. However, when asked whether the president’s opinions on interest rates would carry equal weight with the Federal Reserve’s interest-rate setting committee, Hassett clarified, “No, he would have no weight.”

Hassett elaborated, “His opinion matters if it’s good, if it’s based on data. And then if you go to the committee and you say, well, the president made this argument and that’s a really sound argument, I think, what do you think? If they reject it, then they’ll vote in a different way.”

These remarks come as Trump is reportedly nearing the completion of interviews to potentially replace the current Fed chair, Jerome Powell. Trump has made it clear that he expects his nominee to significantly lower the central bank’s key interest rate, which is currently around 3.6%. Trump has suggested it should be reduced to 1% or lower, a position that finds little support among economists. His vocal stance has sparked concerns regarding the Federal Reserve’s independence from political influence.

Historically, until Trump’s election in 2016, presidents from both political parties had traditionally refrained from publicly commenting on the Federal Reserve’s decisions and generally avoided private interference as well. Economists argue that a politically independent Fed is more effective in controlling inflation, as it can make unpopular decisions, such as raising interest rates, to stabilize prices.

Nevertheless, Trump recently asserted that he “certainly should have a role in talking to whoever the head of the Fed is” about interest rates.

“I’ve done great. I’ve made a lot of money, I’m very successful,” he said. “I think my voice should be heard.”

The Wall Street Journal reported Friday that Kevin Warsh, a fellow at the right-leaning Hoover Institution and former Fed governor, is Trump’s current favorite to replace Powell, whose term ends next May. But Trump has previously hinted that he would pick Hassett.

“I think the two Kevins are great,” Trump told the Journal.

Hassett, for his part, on Sunday said that “in the end, the job of the Fed is to be independent.”

“In the end, it’s a committee that votes,” he said. “And I’d be happy to talk to the president every day until both of us are dead because it’s so much fun.”