National Economic Council Director Kevin Hassett said Tuesday that the Federal Reserve is not cutting interest rates quickly enough, even as the U.S. economy grew at a much faster pace than expected in the third quarter.
The top White House economic advisor is considered a leading contender to succeed Federal Reserve Chairman Jerome Powell after his term ends in May. Hassett said the artificial intelligence boom is boosting economic growth while simultaneously putting downward pressure on inflation.
“If you look at central banks around the world, the U.S. is way behind the curve in terms of lowering rates,” Hassett told CNBC in a “Money Movers” interview.
U.S. economic growth came in at 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 President Donald Trump’s tariffs reducing the U.S. trade deficit.
The Fed lowered interest rates by a quarter point on Dec. 10, the third such cut this year, but the central bank indicated that the pace of future reductions could be slower.
The central bank’s decision had three dissenting votes for the first time since 2019. Powell said the decision to cut a quarter point was a “close call.”
Trump has repeatedly bashed 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.”
