The Federal Reserve decision to cut the main borrowing rate by a quarter point appears to be sitting well with the White House if the indications of Kevin Hassett, the National Economic Council’s director, is any indication.
In an interview with CNBC on Thursday, the day after the Fed moved, Hassett pointed out that the administration and new federal governor Stephen Milan were sought for greater cuts. On vacation as head of the Economic Advisors Council, Milan pushed for a half-point cut, but was voted 11-1 on the Federal Open Market Committee.
However, Hassett was not critical of the committee’s decision.
“The bottom row is slowly and steadily moving towards the target, seeing data coming in, and that’s a sensible policy,” he said in “Squawk Box.” “So I know my colleague Stephen wanted to go to 50 (basis points), but I think 25 was a pretty broad consensus.
President Donald Trump, who nominated Milan for the post, has yet to comment on the Fed’s decision.
In the past, Trump has launched a barrage of criticism at the central bank. The president suggests a position that the benchmark federal funding rate should be 3 percentage points lower, not reflected in the FOMC forecasts for future policy courses released on Wednesday.
Hassett noted that strong economic growth in the third quarter was above 3%. This usually doesn’t claim a drop in interest rates, especially when inflation runs above the Fed’s 2% target.
But Trump says cuts are needed to support the struggling US housing market and help manage the country’s $37 trillion debt financing costs.
Evaluating economic variables during play and determining progressive cuts was a proper move, Hassett is mentioned in a short list of Trump’s picks to take over Powell as chairman next year.
“I think it would be much more wise to look at all models and have a diverse view and decide, “What are you trying to do in this economy, what are you going to do in this economy that’s higher than target but appears to be higher than target,” he said. “They split the baby with this decision, and I think that’s probably a pretty wise call.”
