Kevin Hassett, a seasoned conservative economist and key economic adviser during Donald Trump’s presidency, has emerged as a prominent contender to succeed Jerome Powell as chair of the Federal Reserve. Hassett, who now leads the National Economic Council, previously served as chair of the White House Council of Economic Advisers. His deep experience in the economic policymaking trenches renders him a long-wished-for happy warrior, particularly among the conservative class.
Now 63, Hassett has earned a reputation as one of Trump’s most loyal economic policy warriors. Perhaps his most imposing factor working in his favor is his extremely close ties to the former president. Further boosting his appeal for the role is his relationship to billionaire businessman Ronald Lauder, Hassett’s father-in-law and a long-time Trump donor. Hassett’s odds of getting the gig have dropped sharply since early December. Nonetheless, Wall Street traders are pegging him as the leading candidate to take the helm of the Federal Reserve.
Hassett tried to answer the questions about the independence of the Fed in this recent CNBC interview, but not very well. He underscored the necessity of continuing to keep this independence, calling it “really, really important.” This statement embodies a deeper fear among economists that political outside forces may dictate policy choices by the Fed.
In that same interview, Hassett argued that today’s interest rates aren’t all that high, claiming that there is plenty of room for rates to go down. This is consistent with his broader historical view that economic growth should not be aided through monetary policy. He stated, “The way you’ve got to drive interest-rate movements is with consensus based on the facts and the data.”
Even as analysts have called attention to cracks showing in the U.S. economy, Hassett has insisted that the sky is not falling. Continuing his smear campaign against the Bureau of Labor Statistics, he doubted most of the administration’s economic indicators on bias grounds. He’s the real deal, with no reservations. He vigorously supports Trump’s policy agenda. This ironclad conviction prevents him from acknowledging anything worse than a slight slowdown in new economic data.
To this day, former President Trump is still tweeting his support for Hassett. In a recent interview with the Wall Street Journal, Trump threw bouquets at both Hassett and this other possible candidate. In fact, he said, I really like the two Kevins. He added that Hassett “thinks you have to lower interest rates,” aligning with his own economic philosophy.
As discussions about the next Federal Reserve chair intensify, the implications of Hassett’s potential appointment could significantly influence U.S. monetary policy and economic direction. The Federal Reserve’s decisions play a crucial role in shaping the nation’s economy, making the selection of its chair a pivotal moment for financial markets and policymakers alike.