Trump Commends Hassett, Questions His Appointment as Fed Chair
President Trump recently expressed hesitation regarding the appointment of Kevin A. Hassett, his top economic advisor, as the next Chair of the Federal Reserve. While praising Hassett’s contributions to the administration’s economic policy, Trump indicated that he prefers Hassett’s current role as director of the National Economic Council.
Trump Questions Hassett’s Appointment as Fed Chair
This uncertainty arises amid a complex process to replace Jerome H. Powell, the current Fed Chair. Hassett is considered a frontrunner for the position, yet the situation was complicated by recent developments. The Justice Department issued grand jury subpoenas related to Powell’s management of a significant renovation project for the Fed’s headquarters, valued at $2.5 billion.
Pressure on the Federal Reserve
After news of the investigation surfaced, Powell released an uncommon video statement. In it, he criticized the Trump administration for allegedly attempting to use the threat of criminal charges to pressure the Fed into lowering interest rates. Trump has voiced a desire to reduce borrowing costs more significantly than what the Fed has accomplished so far.
This has led to heightened tension between the president and lawmakers, including former Fed chairs and global central bankers, who have defended Powell against Trump’s criticism. As Trump prepares to select a new Fed Chair, he will need to unify Republican support for his nominee, who requires Senate confirmation.
Potential Nominees
Besides Hassett, other candidates include Kevin M. Warsh, a former Fed governor, and current Fed governor Christopher J. Waller. However, opposition from key Senate figures could complicate the confirmation process.
- Senator Thom Tillis from North Carolina has pledged to oppose any nominee until the legal issues surrounding Powell are resolved.
- His position on the Senate Banking Committee gives him considerable influence over the confirmation outcome.
Tillis stated that the actions of the Trump administration raise serious questions about the independence of the Federal Reserve and the Department of Justice.
Concerns About Hassett’s Credibility
Despite being a strong candidate, concerns linger regarding Hassett’s credibility to lead an institution meant to function independently from the White House. Critics have pointed to his close relationship with Trump and his public support for the administration’s economic policies.
Hassett often appears in the media to promote the president’s agenda and has shifted his economic views in line with Trump’s approach to key issues like trade and immigration. In a recent interview on Fox Business, he predicted the economy is heading towards a remarkable performance in the coming year.
Regarding the Fed investigation, Hassett defended the central bank’s independence. However, he did emphasize the importance of transparency. He stated that if he were to be appointed as Fed Chair, he would prioritize independence and transparency as vital goals for the central bank.
