On Sunday, Kevin Hassett, an economic adviser to former President Trump, commented that Americans are feeling the strain of soaring mortgage rates and rents, which he attributes to unchecked interest rate increases under Federal Reserve Chairman Jerome Powell. Hassett stated on “Sunday Briefing” that the primary housing affordability issue is tied to these high rates, suggesting they ballooned after actions taken by President Biden and Powell.
He believes the Federal Reserve ought to prioritize keeping interest rates and unemployment low while managing its balance sheet in a more traditional, discreet manner.
Hassett asserted that the Fed is “proactively working,” amid a Justice Department investigation into whether Powell’s Congressional testimony regarding renovation costs of Fed buildings exceeded financial expectations. No formal charges have been brought against Powell, who denies any wrongdoing.
Hassett’s remarks came as some lawmakers are calling for the investigation to be halted, including Senator Thom Tillis, who promised to oppose any Fed nominee until the situation is resolved thoroughly and transparently.
The ongoing investigation is seen by some as an attempt by President Trump to influence Powell to lower rates, which Powell, valuing the Fed’s independence, has resisted. This situation marks a significant escalation in Trump’s long-standing tension with the Federal Reserve.
While supporters of Kevin Warsh, Trump’s desired successor for Powell, highlight his credentials, there are concerns about whether he would uphold the Fed’s independence or cater to the president’s interests.
