Minneapolis Fed President Says White House Is Trying To Compromise The Central Bank’s Independence: Report

According to a Financial Times report, Kashkari said on Thursday that the Fed was trying to ignore political turbulence and instead focus on its dual mandate of maximum employment and price stability.

• At an event in Fargo, North Dakota, Kashkari reportedly said that the White House had made “multiple attempts to try to compromise the Fed’s independence” over the past year.
• Kashkari responded to comments from the director of National Economic Council, Kevin Hassett, on the NY Fed’s paper, detailing the impact of tariffs on Americans. 
• Hassett said on Wednesday that the NY Fed’s paper was an embarrassment, adding the central bank’s economists missed key aspects of how the tariffs functioned.

Minneapolis Fed president Neel Kashkari reportedly pushed back on the White House’s criticism of a study on tariffs that found it was harming Americans, adding that it was a step to compromise the central bank’s independence.

According to a Financial Times report, Kashkari responded to comments from the director of the National Economic Council, Kevin Hassett, on the Federal Reserve Bank of New York’s paper that claimed almost 90% of the economic weight of President Donald Trump’s import tax was shouldered by Americans.

Kashkari on Thursday called Hassett’s opinion on the paper and a suggestion to discipline the NY Fed economists as “just another step to try to compromise the Fed’s independence,” as per the report.

The Fed’s Approach

At an event in Fargo, North Dakota, Kashkari reportedly said that the White House had made “multiple attempts to try to compromise the Fed’s independence” over the past year, including “when the Department of Justice served a subpoena to the board of governors over some building expenses. It’s really about monetary policy.”

He added that Fed officials were trying to ignore the political turbulence and instead focus on their dual mandate of maximum employment and price stability.

“As the noise grows louder, we hold even tighter to our mission and double down on staying focused,” he said.

What Did Hassett Say?

Hassett said in an interview with CNBC on Wednesday that the NY Fed’s paper was an embarrassment, calling it the “worst paper” in the history of the Federal Reserve system.

The Trump official said the central bank’s economists missed key aspects of how the tariffs functioned and focused on the prices instead. Hassett claimed that the research did not fully reflect the positive impact on wages and other benefits to U.S. companies.

Meanwhile, U.S. equities declined on Thursday. The SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, fell 0.56% at the time of writing. The Invesco QQQ Trust ETF (QQQ) was down by 0.68%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) dropped 0.69%.

On Stocktwits, retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bearish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) edged up by 0.02% at the time of writing, while the iShares 20+ Year Treasury Bond ETF (TLT) was down by 0.09%.

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