Hassett affirms Fed independence as 68% of Americans demand autonomy

White House National Economic Council Director Kevin Hassett said the Trump administration respects the Federal Reserve's independence, a statement aimed at easing market concerns about political pressure on monetary policy. Hassett, whom President Trump has identified as a leading candidate to replace Chair Jerome Powell, made the remarks as the administration weighs its next move on central bank leadership.

"The Federal Reserve's independence is really, really important," Hassett said, echoing comments from September 2025 when he told CBS's Face the Nation that monetary policy "needs to be fully independent of political influence — including from President Trump." He cited historical evidence that political control of central banks is "a recipe for inflation and misery for consumers."

The affirmation follows a series of actions that have tested the boundaries of Fed autonomy. Trump fired Federal Reserve Governor Lisa Cook and nominated Stephen Miran, his Council of Economic Advisers chair, to a vacant seat on the Fed Board of Governors. Treasury Secretary Scott Bessent also called for a sweeping review of the Fed in a Wall Street Journal op-ed, arguing that "mission creep and institutional bloat threaten the central bank's independence." A CBS News poll from September found 68% of Americans want the Fed to make decisions independently of the president, though 59% of Republicans said the central bank should be guided by what Trump wants.

Hassett is one of three candidates Trump has said he is considering to replace Powell, alongside former Fed Governor Kevin Warsh and Fed Governor Christopher Waller. The next Fed chair will inherit an institution navigating a cooling labor market — U.S. employers added just 22,000 jobs in August 2025, well below economists' expectations, while the household survey showed 288,000 jobs added in the same month, highlighting data discrepancies Hassett attributed to outdated survey methods. Inflation moderated to an average of 1.9% over six months, according to Hassett's own characterization, while second-quarter GDP was revised up to 3.3% and productivity rose 3.8%. Federal funds futures as of September priced in three rate cuts by year-end.

The debate over Fed independence is not new, but Trump's willingness to challenge it directly has escalated. The last time a president so openly sought to influence Fed personnel was in 2019, when Trump repeatedly criticized Powell for raising rates and reportedly explored firing him. At that time, the S&P 500 fell as much as 6% over a three-month period as uncertainty over Fed autonomy rattled markets. A repeat of such volatility could disrupt the current economic expansion, with industrial production already at an all-time high and GDP growing at 3%.

Hassett has sought to separate the question of independence from the question of competence. "Has the current central bank been as independent as we would like, as transparent as we would like?" he asked in September. "I think that there's some dispute about that." He declined to commit to implementing Bessent's proposed overhaul of the Fed should he become chair, saying only that he agrees with Bessent's "vision." Miran, during his confirmation hearing, pledged to "act independently" if confirmed, though he acknowledged Trump selected him "because I have policy views that I suppose that he liked."

The stakes are high for bond markets. If investors perceive the Fed as politically compromised, the risk premium on U.S. Treasuries could rise, pushing yields higher and tightening financial conditions — the opposite of what Trump has sought through his public calls for lower rates. The next Fed chair will need to navigate this tension while managing a labor market that Hassett himself described as showing "less momentum" than expected.

This article is for informational purposes only and does not constitute investment advice.