Kevin Hassett, the director of the National Economic Council, stated that if he were to become the next chair of the Federal Reserve, he would make his own decisions about whether to lower interest rates rather than caving in to political pressure. In line with President Trump’s repeated demands for lower borrowing costs, he went on to say that the Fed has “plenty of room” to cut rates in the upcoming months. “If the data suggests that we could do it, then—like right now—I think there’s plenty of room to do it,” he said at a Wall Street Journal CEO Council event Tuesday. Hassett responded, “Correct,” when asked if that meant the Fed could lower rates by more than the quarter point currently anticipated on Wednesday.
Kevin Hasset claims he won’t succumb to pressure to cut rates
Trump has regularly criticized Jerome Powell, the current chair of the Fed, for what he perceives to be his unwillingness to lower interest rates. Trump has made references to his desire to fire Powell throughout his second term, but Treasury Secretary Scott Bessent has opposed the idea. Hassett has become the front-runner to succeed Powell, whose term as chair expires in May. During his first term, Hassett, a longtime supporter of Trump, was a crucial economic advisor.
Hassett responded, “You just do the right thing,” when asked if he would comply with Trump’s orders on Truth Social if the president told him to lower interest rates. He maintained that rate reductions must be contingent on the state of the economy, adding, “suppose that inflation has gotten from, say, 2.5% to 4%. You can’t cut.” He said he would instead rely on his own “judgment, which I think the president trusts, and the firm commitment to not being partisan.” U.S. inflation this year has hovered around 3%.
Trump said in an interview with Politico released on Tuesday that he wants the next Fed chair to pledge to cut interest rates. The Federal Open Market Committee—which includes the chair, six governors, and five of the twelve regional Fed presidents—sets interest-rate policy. As such, the next chair will be crucial.
Despite Trump’s public claims that he has already made his decision, Hassett said he doesn’t think the president has made up his mind. Bessent also conducted interviews with current Fed board member Christopher Waller and former Fed governor Kevin Warsh. Hassett was identified as a “potential Fed chair” by Trump, who recently declared that he had reduced the list from ten names to one.
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