Friends and former colleagues of President Donald Trump’s top choice to lead the Federal Reserve said they were scared his preferred candidate was too loyal to the president to maintain the central bank’s independence.
Trump has identified National Economic Council Director Kevin Hassett as one of his top three picks to replace Jerome Powell as chairman of the Fed after Powell’s term expires next year, and he is widely considered the frontrunner for the job.
The former Fed economist has toed the MAGA party line over the past several months, attacking the Fed for not lowering interest rates sooner and defending Trump when the president personally insulted Powell and fired the head of the Bureau of Labor Statistics.
While other candidates have criticized the Fed’s policies, Hassett has accused the bank’s governors of playing politics, leading friends on both sides of the aisle to express alarm at his willingness to undermine trust in the Fed, Politico reported.
“I’ve known him for a very long time. I’ve liked him and I’ve respected him, but lately I’ve seen him go on TV and make arguments that really make no sense in support of this administration’s policies,” Gregory Mankiw, a former economic adviser to President George W. Bush, told the outlet.
“It’s a scary thought to have the kind of Fed chair that’s willing to sacrifice the central bank’s independence out of loyalty to the president,” he added. “I’m less confident about Kevin Hassett, given his recent statements.”
Dean Baker, an economist who is critical of Trump but supported Hassett’s nomination to his current post, said he always thought Hassett was a “reasonable person.”
“After seeing the way he’s behaved as a national economic adviser under Trump? I think he’ll do what Trump wants him to. And that’s not what we need at the Fed,” Baker told Politico.
Other former allies said they were worried Hassett wouldn’t be able to put on his “Fed chair hat” given his close ties to Trump, and that even if he did manage to act independently, he has already signaled to business leaders and investors that he is willing to do what Trump wants.
Hassett has said in interviews that the Fed’s ability to determine rates “needs to be fully independent of political influence, including from President Trump,” but Trump has vowed to nominate a Fed chair who agrees with him on lowering interest rates.
White House spokesperson Kush Desai told Politico in a statement that Trump has “put together the best and most experienced trade and economic team in modern political history, and he will continue to hire and nominate the most qualified individuals to key government positions.”
“Any discussion about any potential nominations until officially announced by President Trump, however, is pointless speculation,” he added.
The Daily Beast has also reached out for comment.
Powell signaled last month that the Fed could finally deliver Trump’s long-sought-after rate cut on Wednesday after months of weak job reports. The president has nevertheless continued to blast Powell as “incompetent” and claimed on Sunday that prices are “way down” on “almost everything.”
In fact, Bureau of Labor Statistics data released on Thursday showed inflation was accelerating, as companies continued to pass the cost of Trump’s tariffs onto consumers.
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