Kevin Hassett is no dummy—he’s a seasoned conservative economist. He was a top economic adviser to President Donald Trump, and now he’s angling to be Donald Trump’s next chair of the Fed — replacing Jerome Powell. At 63, Hassett has deep experience in the art and science of economic policy. His deep connections to Trump raise exciting and troubling questions about his possible stewardship of the central bank.
Hassett’s notable tenure as chair of the White House Council of Economic Advisers during Trump’s first term laid the groundwork for his current role as head of the National Economic Council. His efforts leading the fight for the administration’s economic policy have catapulted him to rock star status in conservative circles. Nevertheless, analysts are already asking whether his loyalty to Trump would let him keep the Federal Reserve independent if appointed.
Throughout his career, Hassett has been a constant cheerleader for Trump’s economic policies. You brush away criticism and jump to the administration’s defense at every turn. You do this when data is beginning to indicate real signs of economic weakness in the U.S. economy. Analysts have pointed out that he has consistently downplayed this data, seeking out places to look at the more favorable indicators. Not to mention, Hassett has previously taken a partisan hack job with the Bureau of Labor Statistics, claiming they are posting political reports.
In a recent interview with the Wall Street Journal, Hassett emphasized his belief that lowering interest rates is necessary for sustaining economic growth. “The way you’ve got to drive interest-rate movements is with consensus based on the facts and the data,” he stated, reflecting his approach to monetary policy and economic strategy.
Hassett has deep ties to Trump that go well beyond politics. His father-in-law, Ronald Lauder, is known as a major donor and ally of Trump. Even with these links, questions remain. One, could he work without fear of Trump’s interference if he does take charge at the Fed? In an interview with CNBC, Hassett addressed these concerns directly, affirming that “the Fed’s independence was really, really important.”
Despite his qualifications, some within the Trump administration have reportedly raised doubts about whether Hassett possesses the necessary skills to effectively lead the central bank. This internal skepticism might have a big part to play in whether or not a nomination gets through.
Whether or not Trump does nominate Hassett, he will still need Senate confirmation. Relatedly, his background and views will be subjected to extraordinary scrutiny throughout the process. His confirmation is likely to depend on Senate debate around his economic philosophies and claimed freedom from political influences.
Trump has already signaled strong confidence in Hassett’s capabilities, saying he’s “a man who’s been there a long time. But we don’t know how much weight Trump’s endorsement will carry. Senate leaders will care more about the independence of the Federal Reserve Board than about political connections.
As discussions begin about the future leadership of the country’s central bank, the debate is quickly heating up. Economists and policymakers will be watching Kevin Hassett’s candidacy very, very closely. The choices taken within this consequential window will influence the course of U.S. monetary policy for years to come. They may leave permanent scars on the economy writ large.