Fed Chairman Candidate Hassett Says U.S. Is Lagging On Rate Cuts

National Economic Council Director Kevin Hassett said Tuesday that the Federal Reserve is not cutting interest rates fast enough, even though the U.S. economy has been growing much faster. faster than expected pace in the third quarter.

Hassett, one of the main contenders for chairman of the Federal Reserve Jerome Powell at the end of his term in May, said the artificial intelligence boom is boosting economic growth while putting downward pressure on inflation.

“If you look at central banks around the world, the United States is way behind in terms of cutting rates,” the White House’s top economic adviser told CNBC in a “Money movers” interview.

U.S. economic growth came in at an annual rate of 4.3% in the third quarter, faster than the Dow Jones consensus of 3.2%. Hassett said 1.5% of that growth was due to the president Donald TrumpTariffs reduce the US trade deficit.

The Fed drop in interest rates by a quarter point on December 10, the third reduction this year, but the central bank has indicated that the pace of future cuts could be slower.

Three Fed governors voted against the quarter-point move, the most dissents since 2019. After this month’s meeting, Powell said the decision to cut by a quarter point was a “close decision.”

Trump has repeatedly criticized the Fed for not lowering rates as quickly as he would like. Hassett’s candidacy has raised concerns among some Fed watchers that he is too close to the president.

Hassett told CNBC last week that the Fed’s independence is “really important.”

Trump said in a speech to the nation last week that he would soon announce his nominee for Fed chairman, emphasizing that he would choose “someone who believes very much in lowering interest rates.”

The president’s prime-time speech focused on affordability. His approval rating on the economy rose to 37% in a CBS News/YouGov published Sunday.

Asked about Trump’s declining approval rating, Hassett said public opinion often does not reflect economic numbers.

“Ultimately, it turns out I think it has a lot to do with media coverage and how people react, their insight into the outside world,” Hassett said.