Potential candidates for the Federal Reserve Chairman under Trump: A significant rate cut by the Federal Reserve is reasonable!

Potential Federal Reserve Chairman candidate Trump defended the significant rate cut by the Federal Reserve last month, despite Trump's accusation that the large rate cut by the Federal Reserve was politically motivated. Kevin Hassett, economic advisor to the Trump administration, said in an interview that it was reasonable for the Federal Reserve to cut the main interest rate by 50 basis points instead of 25 basis points, as data showed weakening job market. Hassett said in an interview, "Based on the data they had at the time, it made sense to start cutting rates significantly, as it did look like economic growth was sharply slowing down." Hassett's remarks conflicted with Trump's condemnation of the Federal Reserve's actions earlier this month in a speech to the Detroit Economic Club. Trump said at the time, "In fact, the Federal Reserve cut rates too fast." He added, "The cut was too big, everyone knows this is their attempt at a political operation before the election." He implied that the Federal Reserve was trying to lower borrowing costs to help his Democratic opponent, Harris. Hassett is a researcher at the Hoover Institution at Stanford University and has been chairman of the Trump administration's Council of Economic Advisers since 2017. He has remained in Trump's circle, and if the Republican candidate defeats Harris next month, he is expected to move into leadership positions, including possibly taking over the Federal Reserve. It is expected that Trump will choose a new Federal Reserve Chairman after the current Chairman Powell's term ends in 2026. Trump has been a sharp critic of Powell in the past for not cutting rates as significantly as in 2019. Earlier this year, he warned Powell not to cut rates before the election. However, Hassett agrees with Trump's view that the Federal Reserve has taken "political actions" in recent years. He said, "I think it is reasonable to say that the Federal Reserve has not been as independent as it should be." Hassett cited the Federal Reserve's decision to raise rates in December 2016 before Trump took office, even though the "data did not support a rate hike" at that time. He added that later on, "When the fiscal policy controlled by the Democratic government went out of control, the Federal Reserve did nothing." But Hassett denied concerns that Trump would try to undermine the independence of the Federal Reserve in his second term. He said, "I believe President Trump supports an independent Federal Reserve, but he also wants his voice to be heard, he wants truly independent people there." The Federal Reserve has consistently denied any suggestion that U.S. monetary policy is made for political reasons. After cutting rates by 50 basis points last month, the Federal Reserve is expected to implement smaller 25 basis point cuts in November and December, especially after signs of labor market recovery. Hassett said: "I wouldn't give the Federal Reserve's actions in September a failing grade, although in hindsight, they may wish they hadn't done that."