A top aide to President Trump who is on his short list to be the next chair of the Federal Reserve said on Sunday that the central bank should be “fully independent of political influence,” including from Trump.
“I would say 100% that monetary policy, Federal Reserve monetary policy, needs to be fully independent of political influence, including from President Trump,” White House National Economic Council Director Kevin Hassett told CBS News’ “Face the Nation” show.
“The fact is that we’ve looked at countries that have allowed the leaders to take over the central banks, and what tends to happen is that it’s a recipe for inflation and misery for consumers,” he said.
Trump’s repeated demands that the US central bank cut rates immediately and frequent berating of Fed Chair Jerome Powell for his stewardship of monetary policy have fueled questions about the Fed’s ability to set interest rate policy without regard to politicians’ wishes.
So, too, has Trump’s bid to fire Federal Reserve Governor Lisa Cook, who has sued to challenge her dismissal.
Powell’s term as Fed chair is due to end in May. Trump’s short list of candidates to succeed him includes Hassett, former Fed Governor Kevin Warsh. and current Fed Governor Christopher Waller.
“I don’t have a plan to overhaul the Fed right now. I’m just happy to do my job,” Hassett said.
Hassett endorsed US Treasury Secretary Scott Bessent’s call on Friday for renewed scrutiny of the Federal Reserve, including its power to set interest rates and said he would be prepared to implement the vision outlined by the Treasury secretary. He declined to provide details.
Trump has said that questions about the mortgages on properties Cook owns – and are the subject of a criminal probe by his administration – are sufficient cause for dismissal. Cook has filed a lawsuit seeking to block her unprecedented removal, setting up a legal battle that could upend long-established norms for the Fed’s independence.
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