National Economic Council Director Kevin Hassett, a leading contender to be nominated as Fed Chair, said the Federal Reserve is not cutting interest rates quickly enough, even though the nation’s economy grew at a much faster-than-expected pace in the third quarter.
Hassett is considered a contender to succeed Federal Reserve Chair Jerome Powell when his term ends in May. He said in an interview on CNBC that the artificial intelligence boom is boosting economic growth while simultaneously putting downward pressure on inflation.
“If you look at central banks around the world, the U.S. is way behind the curve in terms of lowering rates,” Hassett told CNBC in a “Money Movers” interview.
Hassett Credits Tariffs for Reducing Trade Deficit
CNBC said that the U.S. economic growth came in at an annual rate of 4.3% in the third quarter, which was faster than the Dow Jones consensus of 3.2%. Hassett told CNBC that 1.5% of that growth was because of President Donald Trump’s tariffs reducing the U.S. trade deficit.
On Dec. 10, The Fed lowered interest rates by a quarter point, the third cut in 2025, but the central bank indicated that the pace of future reductions could be slower.
Three Fed governors voted against the quarter-point move, the most dissents since 2019, CNBC said, and after the December meeting, Powell said the decision to cut a quarter point was a “close call.”
Trump has repeatedly attacked the Fed for not lowering rates as quickly as he would like. CNBC said that Hassett’s candidacy has raised concerns among some Fed watchers that he is too close to the president.
Hassett earlier told CNBC that the Fed’s independence is “really important.”
Trump said in an address to the nation hat he will announce his nominee for Fed chair soon, emphasizing that he will pick “someone who believes in lower interest rates by a lot.“
