President Trump on Friday expressed hesitation in naming his top economic adviser, Kevin A. Hassett, to lead the Federal Reserve, another twist in what has been a drawn-out process to replace Jerome H. Powell at the helm of the central bank.
Mr. Trump praised Mr. Hassett, who serves as director of the White House’s National Economic Council, for his work in defending the administration’s economic agenda, including on TV.
“I actually want to keep you where you are, if you want to know the truth,” the president said during remarks at a health care event at the White House, adding that Fed officials often “don’t talk much.”
“I would lose you. It’s a serious concern to me,” Mr. Trump said.
Mr. Hassett is considered to be a front-runner in the search to replace Mr. Powell, a process that was shaken up this week after the Justice Department served the Fed with grand jury subpoenas related to Mr. Powell’s management of a $2.5 billion renovation of the central bank’s headquarters in Washington.
After the criminal investigation was revealed by The New York Times on Sunday, Mr. Powell released a rare video that called out the Trump administration directly for using the threat of criminal charges to pressure the central bank into lower interest rates.
Mr. Trump wants borrowing costs significantly lower than the Fed has so far delivered, leading to increasingly aggressive attacks on the central bank from the president. Lawmakers rushed to Mr. Powell’s defense this week, including Republicans who have largely stayed silent this year as the president has gone after the Fed and its chair. They were joined by every living former Fed chair, global central bankers and Wall Street in denouncing the move.
The blowback comes as the president needs to rally Republican support for whomever he chooses to replace Mr. Powell as chair when his term ends in May. The Fed chair must be confirmed by the Senate. Besides Mr. Hassett, Mr. Trump is also considering Kevin M. Warsh, a former Fed governor, and Christopher J. Waller, a current governor at the central bank.
Senator Thom Tillis, Republican of North Carolina, vowed to oppose the confirmation of any nominee for the Fed “until this legal matter is fully resolved.”
His support is crucial because he is a member of the powerful Senate Banking Committee, which is responsible for managing the confirmation process for the president’s Fed picks. Republicans have a 13-11 majority on the committee, meaning Mr. Tillis could block Mr. Trump’s nominee from advancing to a full Senate vote.
“If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Mr. Tillis said in a statement shortly after Mr. Powell’s video was released on Sunday. “It is now the independence and credibility of the Department of Justice that are in question.”
Before the latest broadside on Mr. Powell, Mr. Hassett was already facing concerns about his credibility to take over an institution that is supposed to operate independently of the White House, given his proximity to the president.
As the director of the National Economic Council, Mr. Hassett has served as both a leading policy adviser and a spokesman for the president. While he once espoused classic conservative economic views, he has come to embrace Mr. Trump’s approach in areas like trade and immigration in the president’s second term. He frequently appears on television to advance that agenda, often several times a week.
Mr. Trump praised Mr. Hassett hours after his economic adviser completed his latest television interview. Appearing on Fox Business, Mr. Hassett touted the president’s forthcoming plan on housing and predicted the economy is trending toward “one of the best years we’ve ever seen,” potentially with “blowout” numbers on growth.
Asked about the probe into the Fed, and the extent to which Mr. Powell engaged in wrongdoing, Mr. Hassett insisted the White House respected the independence of the Fed. But he cited a concern raised by Jeanine Pirro, the U.S. attorney for the District of Columbia and a Trump ally, that the central bank had not responded promptly to questions in the ongoing probe.
The Fed received two emails from Carlton Davis, a special counsel at the Justice Department, over the holidays. The first came on Dec. 19 and revolved around discussing matters related to the renovations. It was followed by another email on Dec. 29. The emails did not mention the threat of a criminal investigation or subpoenas, and they did not include a deadline for a response.
“If I were Fed chair, then I would insist on transparency,” Mr. Hassett said, adding that “Jay’s a good man, I expect that there’s nothing to see here.”
Mr. Hassett declined to say if he had spoken to the president about becoming Fed chair. “If it were to be me, I have said I would take the job, and I would take that job with a commitment to Federal Reserve independence and transparency, and I think that’s something that I think the Fed could have done a lot better in the past,” he said in the Fox interview.
Colby Smith covers the Federal Reserve and the U.S. economy for The Times.
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