Hassett Says Room Now For Fed To Cut More Than 25 Basis Points

White House National Economic Council Director Kevin Hassett said he sees plenty of room to substantially lower the Federal Reserve's benchmark interest rate.

Hassett, the frontrunner in Donald Trump's search for the next Fed chair according to a Bloomberg report, was asked at the Wall Street Journal CEO Council Summit Tuesday if he would push for the substantially lower rates the president wants if he gets the job.

"If the data suggests that we could do it, then — like right now — I think there's plenty of room to do it," he said. Asked whether that meant more than 25 basis points, he said, "correct."

Hassett's close alignment with Trump has stirred debate over whether he would maintain the Fed's decades-long tradition of political independence on interest-rate decisions should he be selected as chair.

Trump himself said in an interview with Politico published Tuesday that a quick reduction of borrowing costs would be a litmus test for his choice to head the Fed.

Asked whether his loyalty, if he takes the Fed's helm, would be to Trump or to his independent economic judgment, Hassett said he would adhere "to my judgment, which I think the president trusts."

Hassett again directed criticism at the Fed for some of its policy choices in recent years, accusing the central bank of acting politically.

"I think the most important job that the Fed chair has is to be looking at the economic data and to avoid being part of politics," he said.

Source: Bloomberg