Now, veteran conservative economist Kevin Hassett has reappeared as a major actor in the drama surrounding the pending change in leadership of the nation’s central bank. He is the former chief economic adviser to President Donald Trump. Jerome Powell’s term as Fed Chair is coming to an end. As a result, Hassett has become the leading candidate to replace him.
At 63 years old, the smart and affable Hassett has plenty of institutional experience. He also chaired the White House Council of Economic Advisers during Trump’s first four-year term. On March 27, 2017, President Trump appointed Cohn to be the Director of the National Economic Council. His long-awaited loyalty to the eventual 2024 contender is a long-practiced act. His fervent, aggressive defense of the former president’s economic policies has endeared him to many Republican-holier-than-thou figures.
Regardless of the outcome, Hassett’s candidacy has garnered incredible energy and more importantly, attention. His strong credentials and deep connections to Trump are the most important factors fueling this interest. His father-in-law, billionaire businessman Ronald Lauder, is a major donor and ally of Trump. This personal connection means that Hassett’s political fortunes are more tightly tied to the former president’s continuing influence. This unusual relationship speaks to the great promise for a shared pro-growth economic policy viewpoint if Hassett indeed replaces Yellen as Fed chair.
Hassett’s odds in betting markets have been falling in recent weeks. And indeed he has come under fire for his truth-shading of economic data, like telling the public to ignore signs of weakness in the U.S. economy. He has complained about bias on the Bureau of Labor Statistics’ Bureau of Labor Statistics. Equally important, he calls into question the integrity of the economic indicators that guide monetary policy decision making.
In a very recent interview with CNBC, Hassett sought to assuage fears that he is unqualified for his anticipated Fed post. He emphasized the importance of consensus in driving interest-rate movements, stating, “The way you’ve got to drive interest-rate movements is with consensus based on the facts and the data.”
Trump has heaped praise on Hassett’s handling of his administration since day one. In a television interview, Trump remarked, “I actually want to keep you where you are,” underscoring his confidence in Hassett’s capabilities. Trump once called him “a man who’s been there a long time.” This proclamation obviously belies his deep and long experience on the economic front.
As the head of the National Economic Council, Hassett has tremendous sway over White House economic policy deliberations. His tenure gives him the power to influence the direction of these crucial conversations. His ongoing involvement in high-level economic discourse positions him as a key figure in the potential transition of power at the Federal Reserve.
As discussions surrounding Powell’s successor evolve, it remains to be seen how Hassett’s connections and economic philosophy will influence his candidacy. He is passionately devoted to maintaining the independence of the Federal Reserve. This commitment is further evidence that he recognizes its essential role in providing the economic bedrock of stability.
“The Fed’s independence is really, really important.” – Kevin Hassett
The next few months promise to be an important test for Hassett. He would either cement his status as the presumptive leading candidate for the top Fed job, or lose ground to other potential contenders. The U.S. economy is facing unprecedented challenges—including high, persistent inflation and global macroeconomic uncertainties. The decision of who to appoint as the next Federal Reserve chair will have tremendous influence on monetary policy and should help accelerate future economic growth.