National Economic Council Director Kevin Hassett, one of the finalists for Federal Reserve chair, on Tuesday voiced support for central bank independence.
With President Donald Trump appearing to be in the final stages of choosing a successor to Jerome Powell at the Federal Reserve, Hassett declined to directly address his candidacy in an interview with CNBC, but said building consensus is an important part of his job.
“The independence of the Federal Reserve Board is really, really important, and the voices of other people (on the Federal Open Market Committee) are important, too,” he said. “This means we need a consensus based on facts and data to drive changes in interest rates.”
Until last week, Mr. Hassett was seen as the front-runner to replace Mr. Powell, who is nearing the end of his second term as central bank chief. But President Trump said last week that former Gov. Kevin Warsh was also in the lead after a meeting between the two last Wednesday.
There has been a backlash against Hassett in recent days. A person familiar with the matter told CNBC that Trump’s advisers are concerned that Mr. Hassett is too close to Mr. Trump and could be seen as doing his bidding rather than aiming to set interest rates in line with the Fed’s dual mandate of price stability and full employment.
But Hassett said he shouldn’t be criticized for his relationship with Trump.
“I think the president would reject the idea that because he’s a close friend of the president who has worked well with him, he’s not the right person for the job,” he said.
Although Trump appointed Powell, he has consistently criticized the Fed chair.
President Trump has been demanding aggressive interest rate cuts, but this has not been met despite the Federal Open Market Committee (FOMC) approving three consecutive interest rate cuts totaling three-quarters of a percentage point since September. Gov. Stephen Millan, who was appointed by Trump to take office in September, voted against each of those cuts, favoring a half-point reduction.
Mr. Hassett emphasized the need for consensus building at the Fed. President Trump has argued that the Fed should consult him when making interest rate decisions.
“To encourage changes in interest rates, we need to reach a consensus based on facts and data,” he said. “When things are wrong, you explain why and fix them. That’s how things move forward. But the president is a seasoned observer of the economy, and if he’s right, I’m sure others will recognize it as well.”
Mr. Hassett and Mr. Warsh were part of five finalists for the job. Treasury Secretary Scott Bessent, who has been leading the process, said on FOX Business Tuesday morning that a decision would likely be made in early January.
