Federal Reserve chairman candidate Hassett: Respect independence but question Fed overspending; the economy has not prospered because of the Federal Reserve.

Hassett stated that Trump’s views on interest rate levels are “not related” to the Justice Department’s investigation of the Federal Reserve, and he also blamed the Fed for the lackluster growth of the U.S. economy.

On January 12, in an interview with CNBC, Hassett first clarified the boundaries between politics and the judiciary. He said, “I respect the independence of the Fed, and I also respect the independence of the Justice Department,” and emphasized that President Trump’s views on interest rate levels are “not related” to the Justice Department’s investigation of the Fed. He added that he was not informed of any details regarding the Justice Department’s investigative plans. These remarks were intended to address the market’s dual concerns about political intervention in monetary policy and judicial independence. Previously, after receiving a subpoena from the Justice Department, Federal Reserve Chair Powell made a strong statement, saying he would stand firm.

Hassett then shifted his criticism toward the Fed’s monetary policy. He bluntly stated that the U.S. economy is not currently experiencing “prosperity,” and that this is mainly due to the Federal Reserve and its continued implementation of restrictive policies. While affirming the central bank’s independence, his critical stance was clear.

Regarding the recent controversy over the renovation of the Fed’s headquarters building, Hassett confirmed that the project is “severely over budget,” and pointed out that the renovation plan appears “inconsistent” with Chairman Powell’s previous testimony before Congress.

On the labor market issue, Hassett refused to judge whether a 4.4% unemployment rate constitutes “full employment.” He attributed the recent spike in layoffs to downsizing by the federal government and the deportation of illegal immigrants. He insisted that the government’s economic policies are “indeed effective,” and predicted that measures aimed at strengthening domestic manufacturing will bring more hiring in the second half of this year.

It’s worth noting that, as one of the leading candidates to succeed the Federal Reserve Chair, Hassett stated that he remains interested in a position at the Fed.

More updates to come.

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