Hassett says Fed independence is ‘really important’ and chair candidates shouldn’t be disqualified for being Trump’s friend

National Economic Council Director Kevin Hassett, who is being considered for the Federal Reserve chair position, emphasized the importance of central bank independence in a recent interview. As President Donald Trump nears a decision on who will succeed Jerome Powell as the head of the Fed, Hassett refrained from directly addressing his own candidacy but highlighted the need for consensus in decision-making.

“The Federal Reserve’s independence is really, really important, and the voices of the other people at the Federal Open Market Committee are important, too,” said Hassett. “So the way you’ve got to drive interest rate movements is with consensus based on the facts and the data.”

While Hassett was initially seen as the frontrunner for the position, Trump recently mentioned former Governor Kevin Warsh as a strong contender following an interview between the two. However, there have been concerns raised about Hassett’s proximity to Trump and the potential impact it could have on his ability to make impartial decisions regarding interest rates.

Despite these concerns, Hassett defended his relationship with Trump, stating that being close to the president should not disqualify him from the position. He emphasized the importance of considering all viewpoints and data in the decision-making process.

Trump has been vocal in his criticism of Powell, calling for aggressive interest rate cuts even as the Fed has already implemented three consecutive cuts since September. Hassett stressed the need for consensus building within the Fed, noting that decisions should be based on factual data and analysis.

Hassett and Warsh are among the five finalists being considered for the Federal Reserve chair position. Treasury Secretary Scott Bessent indicated that a decision is likely to be made in early January, with the selection process ongoing.

Overall, the discussion surrounding the selection of the next Federal Reserve chair underscores the importance of maintaining the central bank’s independence and objectivity in decision-making. The eventual appointee will play a crucial role in shaping monetary policy and navigating economic challenges in the years ahead.