As speculation intensifies over the next chairperson of the Federal Reserve, 63-year-old economist Kevin Hassett is emerging as a prominent candidate. Hassett is currently a fellow at the Hoover Institution, a right-wing think tank. Throughout his impressive career, he has held a range of high-impact positions, including as chair of the White House Council of Economic Advisers under then-President Donald Trump. Yet his previous rejections for the Fed job and deep connections to Trump raise concerns. Will he really be independent in this role?
Hassett’s role as Trump’s chief economic guru has been well chronicled. He routinely advocates for policies that are a striking match with the former president’s economic agenda. He now heads the National Economic Council and has already emerged as a powerful public voice defending Trump’s economic strategies. His allegiance to Trump is evident, as Trump once remarked, “I actually want to keep you where you are,” highlighting Hassett’s importance in his administration.
It’s encouraging to note that Hassett has had a fairly public role in helping to shape public policy while continuing to serve on UPS’ board. His leadership positions underscore his profound impact on both worlds. His deep experience of these roles uniquely qualifies him to be a leading candidate. If nominated, he’d be one of the best possible choices to become the next Fed chair. Even more worrying for those who care about transportation, analysts say, are Hassett’s close ties to Trump himself. They doubt that he can maintain the independence that the Federal Reserve requires.
Hassett’s overarching economic philosophy focuses on a data-first approach, which is most apparent in public discourse around the interest rate conversation. In a recent interview with CNBC, he has focused on the need to drive the interest-rate movement. “You have to build the support on the data and the facts,” he said. This statement captures his ethos on economic policy-making and the crucial role of empiricism in decision making.
Despite his self-assuredness about analysis of data, Hassett has already earned his critics for failing to notice signs of strain in the U.S. economy. He has been a stalwart defender of Trump’s policies, often questioning data from the Bureau of Labor Statistics and alleging bias within the agency. These allegations have sparked a strong interest from economists and analysts. They contended that such extreme views would prejudice his objectivity if he is confirmed to run the Federal Reserve.
Additionally, Hassett’s claims about the administration’s impact on interest rates have fueled dangerous debates about monetary policy. And he thinks that rates still have further to fall—something that fascination with economic orthodoxy means to do with current monetary policy to help stimulate growth. If he ultimately does lead the Fed, such comments might carry huge weight in financial markets. They can and should shape how we pursue our economic recovery.
The question of Hassett’s qualifications and independence — if he does remain a potential Fed chair — continues to hang over analysts’ heads. His close, long-time connection with Trump makes this especially tricky. Its effects on the independence of the central bank would be troubling. As the Biden administration navigates complex economic challenges, including inflation and labor market fluctuations, selecting a chair who can act independently of political influence remains crucial.
Hassett’s candidacy reflects broader tensions within economic policy circles regarding how closely aligned Fed leadership should be with political figures. The debates around hypothetical nominees continue to rage on. As they do, Hassett’s profile will surely remain under the spotlight for anyone following changes on the frontlines of monetary policy.