Kevin Hassett, a top contender to be the next Federal Reserve chair, says President Donald Trump’s voice would have “no weight” in setting interest rates, despite Trump calling for the opposite just last week.
Trump has tried to influence the Fed for months, lambasting outgoing chair Jerome Powell as a “numbskull” for not cutting rates faster
Chip Somodevilla/Getty Images
Kevin Hassett, a top contender to be the next Federal Reserve chair, says President Donald Trump’s voice would have “no weight” in setting interest rates, despite Trump calling for the opposite just last week.
Speaking Sunday on CBS, Hassett said that while Trump has “very strong and well-founded views” on interest rates, his role as chair if nominated and confirmed would be to find consensus within the Fed's policy-setting Federal Open Market Committee — not from the president.
Hassett leads the White House’s National Economic Council, is a top adviser to Trump, and has increasingly been seen as the frontrunner in the race to succeed Fed Chair Jerome Powell, whose term ends next year.
“In the end, it’s a committee that votes… And I’d be happy to talk to the president every day until both of us are dead because it’s so much fun to talk, even if I were Fed chair or if I wasn’t Fed chair,” Hassett said.
Trump has tried to influence the Fed’s policymaking for months, lambasting Powell as a “numbskull” for not cutting rates as fast as the president would like. On Friday, he told The Wall Street Journal that the next Fed chair should consult with him on rate setting.
“Typically, that's not done anymore. It used to be done routinely. It should be done,” Trump said. “I don't think he should do exactly what we say. But certainly… I'm a smart voice and should be listened to.”
In the same interview, Trump also surprised markets by saying another Kevin – former Fed governor Kevin Warsh – is a frontrunner for the chair position alongside Hassett. “Yes, I think he is. I think you have Kevin and Kevin. I think the two Kevins are great,” Trump said. “I think there are a couple of other people that are great.”
“He thinks you have to lower interest rates,” Trump said of Warsh. “And so does everybody else that I've talked to.”
Trump also said that, in a year, rates should be “1% and maybe lower than that. We should have the lowest rate in the world.”
His comments came after the Fed last week cut its benchmark interest rate by 25 basis points for the third consecutive meeting, to a range of 3.5%-3.75%. Part of that was based on signs of a weakening labor market, despite inflation running well above the Fed’s 2% target.
Asked by CBS if Trump’s voice would have weight on the FOMC, Hassett said: “No, he would have no weight.”
“His opinion matters if it’s good, if it’s based on data. … And then if you go to the committee and you say, ‘Well the president made this argument, and that’s a really sound argument, I think. What do you think?’ If they reject it, then they’ll vote in a different way.”
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