Who is Kevin Hassett? The rumored Fed pick says inflation is ‘way down,’ sees ‘political bias’ in data

To his supporters, Hassett is a consummate political engineer and, in the words of his longtime ally and former Trump adviser Stephen Moore, a “financial strongman” who will defend the dollar. However, for some of his former peers, he has transformed into something far more troubling as an advisor to the president: a loyal politician willing to sacrifice institutional independence — and objective truth — to please his boss.

Hassett has become a regular presence in the news, defending Trump’s policy priorities, downplaying unfavorable data, and repeating the White House line on everything from inflation to the legitimacy of federal statistics. Earlier in November, the NEC director insisted that inflation had “come down a lot” and that the price trajectory was “really good,” even as official data showed the consumer price index had risen for five straight months.

The White House did not respond to that luck’Comment requested by press time.

From happy warrior to Trump’s chief salesman for interest rate cuts

To understand why this change might worry some of his former colleagues, it is useful to remember Hassett’s extensive experience.

Before Trump, Hassett was a thoroughly conservative economist. He has had stints at the Federal Reserve Bank and Columbia Business School. Advisor to the presidential campaigns of John McCain, George W. Bush, and Mitt Romney; He held positions at the American Enterprise Institute and the Hoover Institution. His 2017 nomination to chair the Council of Economic Advisers sparked a letter of support signed by heavyweights from across the political spectrum, including former Fed chairs Alan Greenspan and Ben Bernanke.

Within the White House of Trump’s first term, he became a central figure in designing and promoting the 2017 corporate tax cuts, arguing that they would stimulate investment and manufacturing. He later returned as a senior adviser on economic policy in the era of Covid, and now runs the National Economic Council, putting him at the center of Trump’s agenda during his second term.

This time, Hassett played one of Trump’s fiercest economic alternatives. He told Fox News last week that if he were running the Fed today he would “cut rates now” because “the data suggests we should,” and predicted that Trump’s combination of lower corporate tax rates for domestic factories and new industrial policy would drive “an absolutely successful year” for GDP and job growth in 2026.

He also echoed Trump’s attacks on the central bank and the statistics it relies on: he accused Fed officials of putting “policy before their tenure”; He described the central bank as “late to the game” in lowering interest rates; He points to a partisan “pattern” in jobs data released by the Bureau of Labor Statistics. When Trump fired Bureau of Labor Statistics Commissioner Erica McIntarfer and accused her of “rigged” numbers, a smiling Hassett appeared on television, framing the move as a matter of accuracy and practicality.

This is where some of his old allies broke away.

“If you had asked me a year ago, I would have said I thought Kevin would be a good choice,” said Dean Baker, a progressive economist who co-authored papers with Hassett and previously supported him at CEA. “I wouldn’t say that today. Kevin has been incredibly dishonest.”

Baker, who has spent decades analyzing BLS data, called Hassett’s talk of partisan bias “not at all dangerous,” noting that the agency’s methodology is public and constantly refined based on internal and external research. In his view, the concern is not that Hassett honestly believes the numbers are “cooked,” but that he is willing to say things he knows are wrong because that’s what Trump wants.

“I will not depend on him to do what he, in his professional opinion, believes is right, as opposed to what Donald Trump is asking him to do,” Baker said.

He specifically points out the contrast between Hassett and Bernanke. Like Hassett, Bernanke served as head of the CEA for a Republican president (George W. Bush) before moving to the Fed.

But unlike Hassett, Baker said, “Bernanke never compromised as chairman.” luck. “He defended Bush’s policies, which you would expect, but he didn’t say things that were blatantly untrue.”

Hassett’s willingness to provide intellectual cover for Trump’s grievances extends beyond statements. He also put forward a legal theory about how the president could have fired Powell before his term ended.

In July, Hassett suggested that cost overruns for renovating the Federal Reserve’s headquarters in Washington, D.C. – the Eccles Building – might constitute “reason” for its removal. He pointed to a figure of $700 million in overruns in the $2.5 billion project, calling it mismanagement that may have given Trump the legal opportunity he had long sought to oust Powell.

Gregory Mankiw, former head of CEA under Bush and a Harvard professor, wrote in an email to: luck And it was “painful” to watch Hassett on TV in these instances, when he was “vigorously defending some of President Trump’s economically illiterate policies.”

However, Mankiw added: “I like it and consider it a good economy.” The big question, he said, is whether Hassett will demonstrate “the degree of political independence necessary to be a successful Fed chairman.”

Hassett case

Within Trump’s orbit, criticism that Hassett is a Trump loyalist is dismissed as an establishment concern. Moore, a former Trump adviser and senior fellow at the Heritage Foundation, said Hassett is exactly what the doctor ordered.

“I can’t think of anyone better than him,” Moore said. luck. “[Kevin] Understands that the Fed’s purpose is to keep inflation under control.

Perhaps William Beach, the former commissioner of the Bureau of Labor Statistics and a Trump appointee who has known Hassett for 25 years, makes the strongest defense of all.

Beach described Hassett as a “fine economist” with deep knowledge of the banking system and a rare ability to communicate clearly, skills he said were essential for any Fed chair.

When pressed about Hassett’s skepticism about the BLS’s jobs data, Beach declined to comment and appeared annoyed, saying only that the Fed “will always rely on the best statistics available.”

The hesitation contradicts Beach’s previous comments. In a previous interview with luck, He has sharply criticized efforts to portray official jobs data as politically manipulated, warning that undermining confidence in federal statistics is “extremely dangerous” because “markets are so dependent on the jobs report.”

However, in this case, Beach focused squarely on his long relationship with Hassett and what he described as his “sound judgement,” saying he had “confidence in himself.” [Hassett] It will put the interests of the Fed and the American economy first.

Inflation risk premium

While Hassett celebrated the market’s initial reaction to reports that he was the front-runner to replace Powell, veteran Fed watchers see warning signs flashing in the bond market.

John Hilsenrath, Senior Consultant at StoneX and former Wall Street Journal The Fed correspondent noted that the immediate rise in 10-year Treasury yields is a big deal.

The higher yield suggests bond traders are betting that the Hassett-led Fed may be more lenient on inflation, necessitating higher yields over the long term to offset those risks, he said in a LinkedIn post.

Furthermore, Hilsenrath added that while a yield near 4% may seem manageable, it is actually “exceptionally low” given that inflation remains above the Fed’s 2% target and the budget deficit is approaching $2 trillion. If the bond market loses confidence in the Fed’s independence, this disconnect could be violently corrected, sending interest rates higher.

It reflects the “Mickey Mouse” danger that Baker warned about: an administration that appears unprofessional, whose employees fear the president’s correction, and a Fed that is seen as pliant, which risks rebellion by bond vigilantes.

“There are people who may understand the way the economy works, but they are afraid of Trump,” Baker said. “At the end of the day, he’s the one who makes the decisions.”