At WSJ Event, Hassett Says Decisions Will Be Based on His Judgment, Not Politics
Kevin Hassett, Chairman of the White House National Economic Council (NEC) and a leading candidate for the next Chair of the U.S. Federal Reserve (Fed), stated that there is ample room to significantly cut the benchmark interest rate. Although Hassett, who serves as President Donald Trump’s “economic advisor,” emphasized that monetary policy decisions would be made based on his independent judgment rather than political pressure, President Trump, in an interview released the same day, named support for rate cuts as a key requirement for the next Fed Chair.
On December 9 (local time), during the Wall Street Journal (WSJ) CEO Council event, Hassett was asked whether he would make substantial rate cuts if appointed Fed Chair. He responded, “If the data continues to show, as it does now, that we can do that, then there is plenty of room for cuts.”
When asked whether there was a possibility of cutting rates by more than 0.25 percentage points next year, Hassett replied, “Yes,” thus leaving open the possibility of consecutive or larger rate cuts beyond a single 0.25 percentage point reduction.
The market expects the Fed to cut rates by 0.25 percentage points the following day, but there is caution that next year’s overall monetary policy stance could be more hawkish than anticipated. While the labor market is showing signs of slowing, inflation remains well above the Fed’s 2% target, leading to a significant number of voices within the central bank advocating for holding rates steady.
Known as “Trump’s economic advisor,” Hassett stated that if nominated as the next Fed Chair, he would not be swayed by public pressure from the White House. Since January of this year, even before the start of his second term, President Trump has publicly demanded that current Fed Chair Jerome Powell cut rates.
Hassett said, “It’s simply about doing the right thing,” adding, “If you assume inflation rises from 2.5% to 4%, then in such a scenario, you cannot cut rates.” He further stressed that monetary policy would be “based on my judgment, which the President trusts, and on a firm commitment to remain nonpartisan.”
However, in an interview with the U.S. political news outlet Politico released that day, President Trump answered “Yes” when asked if support for rate cuts is the criterion for nominating the next Fed Chair. He also mentioned at a recent White House event that he had narrowed the list of candidates for the next Fed Chair from ten to one, referring to Hassett as a “potential Fed Chair.”
In response, Hassett commented, “He changes his mind even after making decisions,” and added, “Ultimately, it will depend on his judgment as to which position is the best fit for me-whether it’s the NEC or the Fed.”
Current Fed Chair Jerome Powell’s term expires in May 2026. In addition to front-runner Hassett, other candidates mentioned for the next Fed Chair include Fed Governor Christopher Waller and former Fed Governor Kevin Warsh.
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