• White House economic adviser Kevin Hassett publicly affirmed respect for Federal Reserve independence, countering speculation about political pressure on monetary policy.
  • The statement helped calm bond markets, with the 10-year Treasury yield dipping 2 basis points on the news.
  • Experts say the remark signals the administration’s intent to avoid overt conflict with the Fed, at least for now.

No Interference, for Now

Kevin Hassett, director of the National Economic Council, told reporters on Thursday that he “fully respects the Federal Reserve’s independence” and that the White House has no plans to intervene in rate decisions. His comments come amid growing chatter that President Trump might push for looser policy as the economy shows signs of slowdown.

“We have a very good relationship with Chair Powell,” Hassett said during a press briefing. “I’ve spoken with him recently, and we both agree that the Fed must be free to make its own judgments.” The remarks were seen as an effort to dial back market jitters after a series of tweets from the president criticizing the central bank’s stance.

Market Reaction

Treasury yields edged lower following the statement, with the benchmark 10-year note falling to 4.21% from 4.23% late Wednesday. The S&P 500 trimmed earlier losses, closing flat after being down 0.3% before Hassett’s comments. “Any hint of political interference would be a red flag for investors,” said Priya Mehta, chief economist at Beacon Policy Advisors. “This is a clear signal that the administration is trying to avoid spooking the markets.”

Background

Hassett’s reaffirmation comes as the Fed holds rates steady at 5.5%, with markets pricing in a cut at the September meeting. The president had previously called for lower rates, but has refrained from direct attacks on Powell this year. The delicate balance between fiscal and monetary policy remains a key theme, especially with inflation still above the 2% target.

Correction: An earlier version of this article misstated the timing of Hassett’s press briefing. It occurred on Thursday, not Wednesday.