Kevin Hassett backs Federal Reserve independence as Donald Trump weighs Powell successor

National Economic Council Director Kevin Hassett, one of the contenders to succeed Jerome Powell as Federal Reserve chair, on Tuesday (December 16) voiced support for the central bank's independence, even as US President Donald Trump moves closer to naming a replacement.

In a CNBC interview, Hassett avoided commenting directly on his candidacy but underscored the importance of consensus-building within the Federal Reserve. He said policy decisions should be driven by collective judgment and economic evidence rather than individual influence.

"The Federal Reserve’s independence is really, really important, and the voices of the other people at the [Federal Open Market Committee], they’re important, too," Hassett said. “So the way you've got to drive interest rate movements is with consensus based on the facts and the data."

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Until last week, Hassett was widely seen as the leading candidate to replace Powell, whose second term as Fed chair is nearing its end. However, Trump said that former Federal Reserve Governor Kevin Warsh has also emerged as a strong contender following a meeting between the two last Wednesday.

In recent days, Hassett’s prospects have faced resistance. Sources told CNBC that some of the president’s advisors are concerned he could be viewed as too closely aligned with Trump, raising questions about whether he would act independently or follow White House preferences instead of adhering to the Fed’s dual mandate of stable prices and full employment.

Hassett dismissed those concerns, arguing that his working relationship with the president should not be seen as a liability. "The idea that someone isn’t qualified for the job because they are a close friend who’s worked well with the president is something that I think the President rejects,” he said.

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Trump, despite appointing Powell, has repeatedly criticised the current Fed chair and has pushed for aggressive interest rate cuts. His dissatisfaction has persisted even after the Federal Open Market Committee approved three consecutive rate cuts since September, totalling three-quarters of a percentage point.

Governor Stephen Miran, a Trump appointee who joined the Fed in September, voted against each of those cuts, instead favouring half-point reductions. Trump has also argued that the Fed should consult the president when making interest rate decisions.

Against that backdrop, Hassett reiterated that building consensus within the central bank remains essential to effective monetary policy.