Kevin Hassett is probably the most seasoned conservative economist and a former chief economic adviser to Donald Trump. Now, he’s viewed as a leading candidate to succeed Jerome Powell as chairman of the Federal Reserve. At 63, Hassett’s resume is littered with both academic and government accomplishments in the sphere of national economic policy. Having served as the chair of the White House Council of Economic Advisers during Trump’s first term, he’s now at the helms of the National Economic Council.
In testimony like today’s, where Hassett is expected to defend Trump’s economic policies tooth and nail. He consistently dismisses data that show weakness and/or recession signs in the U.S. economy. His dramatic move has turned heads of many analysts. They have raised doubts about his lacking any skills needed to rub out the top of the independent central bank. Critics point to his prior actions and his track record of making biased claims at the Bureau of Labor Statistics. They contend that this means he will be unable to exercise the independence expected of any Federal Reserve chair.
Donald Trump went out of his way to publicly praise Hassett, describing him as a “great representative.” When it came to Hassett, he really, really didn’t want to let him leave. “I actually want to keep you where you are,” Trump reportedly told Hassett. He’s certainly right about one thing—interest rates need to come down. This position would put Hassett’s outlook directly at odds with the philosophy behind an independent Fed.
Hassett has attempted to quell fears about his perceived lack of respect for the independence of the Federal Reserve, calling that independence “really, really important. First, he has made clear the need for steering interest-rate directions by majority rule founded on objective evidence. Though there is pressure to decrease rates even more, as he told Tax Notes in August, he believes there is still space for deeper cuts.
As the debate over who should helm our country’s Federal Reserve over the next few years, the economic establishment is listening with bated breath. That makes the choice of a new chair particularly consequential for future monetary policy. This crucial decision will set the course for the U.S. economy for years to come.
Hassett’s close ties to Trump have extended beyond policy issues. His father-in-law is billionaire businessman Ronald Lauder, who has been a long-time donor and ally to Trump. This relationship begs the question of conflicts of interest if he is appointed to assume the post as chairman.
With his experience in economic advisory roles and his alignment with Trump’s policies, Hassett represents a continuation of the administration’s economic strategies. Speculation in GOP policy circles has suggested that there is deep skepticism among the Trump administration quarters about his ability to successfully steer an independent Fed. Whether he will indeed be nominated or whether another challenger will emerge is still an open question.