Kevin Hassett and Fed Independence: A Possible Successor Weighs in on Monetary Policy

Kevin Hassett, a senior advisor to U.S. President Donald Trump and one of the candidates considered to succeed Jerome Powell as chairman of the Federal Reserve (Fed) , stressed the need for the institution to maintain its independence from politics .

Speaking to CBS News, Hassett said, “I would say 100 percent that the Federal Reserve’s monetary policy has to be completely independent of political influence, including that of President Trump.”

Hassett noted that in countries where political leaders assume direct control over central banks, the results are often detrimental. He argued that these practices lead to high inflation and losses for consumers , emphasizing the importance of maintaining the Fed as an autonomous entity.

During Trump's tenure, the relationship with the Fed has been characterized by pressure over interest rate policy and criticism of Fed Chairman Jerome Powell. Furthermore, Trump's attempt to remove Governor Lisa Cook and the subsequent lawsuit she filed have raised questions about the Fed's ability to act independently.

Powell's current term ends in May 2026, raising the possibility of a change at the central bank's chairman. Trump's candidates include Kevin Hassett, former Governor Kevin Warsh, and current Governor Christopher Waller .

Despite being on the shortlist, Hassett has indicated that he has no immediate plans to reform the Fed , and that his focus would be on carrying out his duties responsibly. "I'm happy to do my job," he declared.

The economist also backed Treasury Secretary Scott Bessent's remarks about the need for greater scrutiny of the Fed's rate-setting power , signaling a willingness to implement Bessent's views if necessary, though without providing additional details.

Political intervention in central banks can have significant effects on the economy , from inflation to market confidence. Hassett's position highlights the need for the Fed to act autonomously, protecting financial stability and ensuring that monetary policy decisions respond to economic criteria rather than political pressures.

With Powell's term approaching its end, the debate over who will succeed him as Fed chairman will continue to be relevant in the coming months. Hassett's stance on the central bank's independence could influence perceptions of his candidacy, especially in a context where politics and economics intersect in complex ways.

The appointment of the new Fed chairman will be crucial not only for the United States but also for the global economy, given the influence the Fed's decisions have on international financial markets and the stability of the U.S. dollar.