Kevin Hassett, a top contender to lead the Federal Reserve, says the U.S. central bank has “put its independence and credibility in jeopardy” by doing more than it’s supposed to.
On CBS’ Face the Nation, Kevin said flat out, “The question is, has the current central bank been as independent as we would like, as transparent as we would like? And I think there’s some dispute about that.”
This guy is the Director of the National Economic Council and one of Trump’s longest-serving economic advisers. And he’s telling you that the Fed is drifting into dangerous waters.
He’s backing calls for a full, nonpartisan review of the Fed’s current role in regulation, monetary policy, and even research. And yeah, he fully agrees with the Wall Street Journal piece by Treasury Secretary Bessent that accused the central bank of serious “mission creep.”
Kevin questions labor data and inflation expectations
Before he even got to the Fed, Kevin slammed the current jobs data as unreliable garbage. “They had the biggest revisions in 50 years over the summer,” he said, pointing to the 22,000 new jobs reported for August.
But that’s just the payroll survey. The household survey for the same month showed 288,000. “They should have the same answer,” Kevin said. “What’s wrong with the data is that people aren’t filling out the forms and sending in the surveys.”
He said the way jobs data is collected is outdated and misleading. “We’ve got to modernize the way we do the labor data,” he argued. He mentioned private firms like Homebase, which reported 150,000 jobs in August, again showing a major disconnect.
And it’s not just the jobs numbers. Kevin said he’s skeptical of all the labor-related data right now.
Asked if he believes the models and revisions, he said, “No. The point is when there’s dissonance in data that you have to sort of watch how it all works out.” While second-quarter GDP was revised up to 3.3%, and the Atlanta Fed projects 3% for Q3, manufacturing jobs are still down.
Kevin asked: “How is it that industrial production is at an all-time high while manufacturing employment is down?” He blamed flawed surveys and added that last year’s benchmark revision changed over a million jobs.
He also responded to concerns about inflation. “It was in the high threes when President Trump took office,” he said. “The average over the last six months is 1.9.” Futures markets show that the Fed is expected to cut interest rates three times this year, which, according to him, means the Fed believes inflation is under control.
Kevin warns against politicized data and fed overreach
Asked about President Trump firing the Bureau of Labor Statistics chief, Kevin said there are “patterns in the data that look like political bias,” but they could be unintentional. “We need to get a new set of eyes in there to make sure that things are more transparent, that we modernize the surveys,” he said.
When asked if he trusted the numbers, he said clearly: “I think the BLS numbers need to really be improved.” He talked about immigration too. “Private sector employment is up by about half a million this year,” he said.
Unemployment claims are also telling. “About 80% of the claims for unemployment over the last few months have come from blue states,” he said. Cities like Portland and Chicago are seeing people leave, and it’s showing up in the data.
When Brennan brought up polling showing that 70% of Americans want the Fed to operate independently from Trump, Kevin didn’t hesitate. “If I were in that survey, I would say 100% that Fed monetary policy needs to be fully independent of political influence,” he said. “Including from President Trump.”
He said letting politicians run central banks is a recipe for disaster. “What tends to happen is that it’s a recipe for inflation and misery for consumers.” That line right there? That’s the entire case for an independent Fed.
Brennan kept pressing. Did he have a plan to fix the Fed? “I don’t have a plan to overhaul the Fed right now,” he said. “I’m just happy to do my job.” But he admitted he talks to the president “about everything from golf to decorating the Oval Office to monetary policy.” And when asked if he’d implement Bessent’s proposed vision for the Fed, Kevin replied, “Yes, I agree with this article.”
Kevin didn’t deny being interested in the chair role, but he didn’t confirm it either. “It’s a hypothetical that we’ll see.” But with Trump hinting about putting him in charge, and with Kevin already laying out what’s broken, this looks less like a hypothetical and more like a preview.
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Source: https://www.cryptopolitan.com/hassett-slams-fed-mission-creep-independence/
