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National Economic Council (NEC) Director Kevin Hassett said Monday that Federal Reserve Chair Kevin Warsh is not soliciting advice from the White House on monetary policy.
“We’re very close friends,” Hassett said on CNBC’s “Squawk Box,” referring to Warsh.
“We’ve known each other for 30 years. … We definitely talk,” he told host Joe Kernen. “But he’s not asking the White House for advice [on] what to do with interest rates.”
Last Wednesday, the Federal Open Market Committee (FOMC) voted unanimously to hold interest rates steady at its first meeting of Warsh’s term. With that decision, the committee maintained its baseline interest rate at a range of 3.5 percent to 3.75 percent.
Warsh succeeded former Fed Chair Jerome Powell last month, while Powell remains on the central bank’s board of governors and is one of 12 voting members of the FOMC.
President Trump often criticized Powell for not backing rate cuts last year, before the FOMC voted to lower interest rates by 0.25 percentage points at each of its final three meetings of 2025.
Ahead of the FOMC’s two-day meeting, the president also said on NBC’s “Meet the Press” earlier this month the central bank should lower interest rates.
“Kevin is fantastic, and I want him to do whatever he wants,” Trump told host Kristen Welker. “I don’t want to have a big influence on him.”
But in announcing the unanimous vote to hold rates steady, the Fed noted inflation is still above its 2 percent target rate.
Inflation hit a three-year high in May, with prices rising 4.2 percent year over year amid energy shocks due to the war in Iran. In February, annual inflation stood at 2.4 percent.
While economic conditions could change, nine FOMC officials projected at least one rate hike this year in the committee’s quarterly Summary of Economic Projections. Eight officials said rates will remain steady through 2026, while one predicted a sole rate cut.
Hassett argued Monday that Warsh “made a huge amount of progress” regarding how he will “improve” the central bank.
“You can see that he’s organizing the Fed to make sure that… there are new procedures, new ways of thinking about things, inspection of old models and so on, so that we never get back to a situation where the Fed’s not moving and we got 9 percent inflation,” the NEC director told Kernen, referencing when annual inflation soared above that amount in 2022.
During his press conference after the FOMC vote, Warsh indicated the Fed will move away from forecasting its own actions.
In that vein, the central bank chair was the sole FOMC official not to provide a projection regarding interest rate activity through this year.
“When all the financial markets are doing is reflecting back what we’ve said, then we’re taking the most important source of information and we’re being blind to it,” Warsh told reporters.
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