Federal Reserve chair candidate Kevin Hassett reiterated that the central bank will remain independent even if he becomes chair.
He said he would listen to President Trump because he has “very strong, well-founded views,” but that the path for interest rates would still be determined by the Federal Open Market Committee.
He also said Trump’s opinion would not override policymakers’ votes to set the federal funds rate. He made the point after President Trump said the United States “should play a role” in dialogue with central bank operators.
Hassett explained that he already speaks with President Trump every day as chairman of the National Economic Council, and that they are currently discussing monetary policy.
He said the talks had no formal weight, but that wouldn’t change if he became Fed chair.
He added that Trump’s views could only be raised within the committee if supported by data. He also clarified that the president’s voice carries “no weight” compared to voting members.
Inflation and expense bill reporting
Margaret Brennan pressed Hassett on the administration’s claims that prices were falling. He pointed out that the consumer price index rose 3% year-on-year, and the personal consumption index rose 2.8% year-on-year.
Hassett said President Trump showed a graph tracking item-level changes during his speech in Pennsylvania. He said prescription drugs rose 9% under President Joe Biden, but are down six-tenths of a percent this year.
He said gas prices have fallen from all-time highs and that President Trump also pointed to eggs during the event. He said inflation is driven by micro-shocks like the bird flu, as well as macro-factors like large budget deficits and an accommodative Federal Reserve. He said the impact of the tariffs would be “mixed.”
Hassett said the deficit is expected to be $600 billion lower than last year, and the trade deficit is half what it was before. He said these numbers bring inflation closer to the Fed’s 2% goal.
Margaret asked when voters would start feeling the effects. Hassett said sentiment typically declines during government shutdowns, and economic growth is 4%. He said income growth this year has increased by about $1,200, and strong wallets have produced the biggest Black Friday. He said real purchasing power decreased by about $3,000 under the Biden administration, but increased by $1,200 this year.
Hassett noted that under the Biden administration, groceries went from $400 a month to $525 a month, and while costs have come down this year, there’s still room for them to go down. He said tariffs on some food products had been lowered, adding: “If it doesn’t work here, we won’t impose tariffs.”
He also said oil prices are low enough that the administration has room to act on Venezuelan oil flows.
He said he was “not a foreign policy expert” but said black market oil shipments were keeping sanctioned countries afloat and that the United States was slowing down those shipments. He said he did not expect global prices to change because these countries were “already in crisis.”
Responding to employment data and the Fed’s candidate list
Margaret then asked about the Fed’s statement that job growth has slowed and CEOs’ expectations that job growth will decline in 2026. Hassett said the Fed expects strong growth going forward and that future statistics will provide a clearer picture.
He said it was difficult to identify surveys and said household surveys were reliable. He said that although the October household budget survey has not been released, the November release will be important in determining the job market.
Margaret also asked about President Trump’s nomination of him and Kevin Warsh as finalists for Fed Chair. She played off President Trump’s comments that he should “play a role” in dialogue with the Fed. Hassett said he already speaks with President Trump every day and enjoys the meeting.
He said he would continue to talk to Trump “even if I’m the Fed chairman, or even if I’m not the Fed chairman.” He said he expects the same from Warsh if he is selected.
Hassett said all Fed chairmen are consulting with market experts, but reiterated that Trump’s opinion will not outweigh voting members. He said the only thing he could do was to have a healthy debate with the committee and let it decide.
