Kevin Hassett criticizes Fed officials over interest rate hikes

White House National Economic Council Director Kevin Hassett has criticized Federal Reserve officials for advocating interest rate increases despite core inflation tracking at 2%. Speaking at a Georgetown University event, Hassett questioned the rationale behind the central bank's recent policy direction and suggested that the Federal Reserve is currently experiencing a period of unusual partisanship.

Hassett specifically targeted the continued presence of former leadership on the Board of Governors. He noted that while historical norms typically see chairs and vice chairs step down from the board after their executive terms end, former Chair Jerome Powell and former Vice Chair for Supervision Michael Barr have both retained their seats. Hassett argued that these departures from tradition, combined with calls for hikes from officials not appointed by Donald Trump, necessitate efforts to restore the Fed's independence.

This criticism follows a recent Federal Open Market Committee decision to raise the benchmark interest rate by 25 basis points. The decision was supported by Chairman Kevin Warsh, Powell, Barr, and other voting members. Current projections from the committee suggest that a majority of officials anticipate further rate increases before the end of the year.