Federal Reserve chairman contender Kevin Hassett has once again repeated that the central bank will stay independent even if he ends up as chair.
He said he would hear President Trump out because the president has “very strong and well-founded views,” but the rate path would still come from the Federal Open Market Committee.
He also said Trump’s opinions would not override the votes of the policymakers who set the federal funds rate. He made that point after Trump said he “should have a role” in speaking to whoever is running the central bank.
Hassett explained that he already talks to Trump every day as the head of the National Economic Council and said he discusses monetary policy with him now.
He said that would not change if he became Fed chair, though the conversations would not carry any formal weight.
He added that Trump’s view could be raised inside the committee only if it is backed by data. He was also clear that the president’s voice would have “no weight” compared with voting members.
Reporting inflation and spending claims
Margaret Brennan pressed Hassett on the administration’s claim that prices are dropping. She pointed to the Consumer Price Index rising 3% year over year and the personal consumption index rising 2.8% year over year.
Hassett said Trump showed charts during a speech in Pennsylvania that tracked item-level changes. He said prescription drugs rose 9% under Joe Biden and are now down six-tenths of a percent this year.
He said gasoline fell from record highs and said Trump also pointed to eggs during that event. He said inflation came from micro shocks like avian flu and macro drivers like large deficits and an accommodative Fed. He said tariff effects are “mixed.”
Hassett said the deficit is on track to come in $600 billion lower than last year and said the trade deficit is half of what it was. He said those numbers move inflation toward the Fed’s 2% target.
