Hassett Questions Fed Rate Hikes Amid Subdued Inflation and Partisan Central Bank

National Economic Council Director Kevin Hassett expressed concern about the Federal Reserve's recent decision to raise interest rates, citing a core inflation rate of 2%. He accused central bank officials who were not appointed by President Donald Trump of undermining Fed independence through public calls for additional rate hikes.

Hassett pointed out that former Fed Chair Jerome Powell and former Vice Chair Michael Barr have retained their board seats after stepping down from their executive roles, which is a departure from historical norms. He also noted that the Federal Open Market Committee voted unanimously to raise the benchmark interest rate last week, with all voting members supporting the increase.

Additionally, Hassett questioned why Fed policymakers are pursuing monetary tightening when inflation remains subdued. He stated that financial markets share his concerns and that public calls for further hikes from non-Trump appointees demonstrate a lack of independence within the central bank.