"It Is True That I Am Close to the President"
Trump’s Inner Circle Raises Concerns Over Fed’s Political Independence
Kevin Hassett, Chairman of the White House National Economic Council (NEC) and one of the leading candidates for the next chair of the US Federal Reserve (Fed), stated, "The President will reject the opinion that being friends with the President disqualifies someone from being chair." This remark is interpreted as a direct rebuttal to concerns that Hassett's close relationship with President Donald Trump could undermine the political independence of the Fed.
Kevin Hassett, Chairman of the White House Council of Economic Advisers, is answering reporters' questions in front of the White House in Washington D.C. on the 16th (local time). Photo by Reuters Yonhap News
In an interview with CNBC on the 16th (local time), Chairman Hassett said, "This is why someone should not be disqualified from the position of Fed Chair," making his stance clear.
Chairman Hassett also met with reporters outside the White House, saying, "It is true that I am close to President Trump, but it does not make sense to be deemed unfit for any position simply because one serves the President well."
Hassett is currently considered one of the strongest candidates to succeed Jerome Powell, whose term as Fed Chair ends in May next year, along with former Fed Governor Kevin Warsh.
Hassett's remarks are seen as a response to a recent CNBC report that senior officials around President Trump, who holds the authority to appoint the next Fed Chair, have conveyed their opposition to Hassett's candidacy on the grounds that he is too close to the President.
Previously, CNBC reported that senior officials with direct access to President Trump were opposing Hassett's nomination as Fed Chair, citing concerns that his close relationship with the President could compromise the political independence of the central bank.
Hassett commented, "One of the great things about American democracy is that there is a lot of discussion and scrutiny," adding, "Ultimately, this will help everyone make better choices, and I am pleased that people are expressing their opinions."
Hassett also argued that the United States has ample room to cut interest rates. He stated that President Donald Trump believes interest rates could go even lower.
However, Hassett emphasized that all policy decisions by the Fed must be based on consensus drawn from facts and data. He said, "The independence of the central bank is really, really important, and the voices of others on the (FOMC) are also important," adding, "That is why the way to guide interest rate moves is to reach consensus based on facts and data."
The market's attention is focused on the selection of the next Fed Chair. President Trump, who has announced that he will nominate the next Fed Chair early next year, recently told reporters that the pool of candidates has been narrowed down to two or three, mentioning Chairman Hassett and former Governor Warsh.
According to the Financial Times (FT), Jamie Dimon, CEO of JPMorgan Chase and a highly influential figure on Wall Street, has signaled support for former Governor Warsh among the two "Kevins."
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