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Americans crushed by high mortgage rates and rents are paying the price for a Federal Reserve that allowed rates to spiral “out of control” under Chair Jerome Powell, Trump economic advisor Kevin Hassett said Sunday — amid growing political friction over a Justice Department investigation targeting Powell.
“The number one affordability problem that Americans have is high mortgage rates, high rents that came about because of the huge increase in interest rates that happened after Joe Biden and Jay Powell let interest rates get out of control,” Hassett said on “The Sunday Briefing.”
Hassett argued that the Fed should focus on keeping interest rates and unemployment low and “getting the balance sheet as lean as possible,” and that it should do it “the old-fashioned way, quietly.”
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He claimed the Fed was “forthcoming” with the DOJ’s investigation into whether Powell was truthful during congressional testimony regarding the cost and scope of renovations to the Fed’s two main buildings on the National Mall, which have overrun their expected budget and are projected to cost $2.5 billion.
No charges have been filed, and Powell has denied any wrongdoing.
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“All these things are things that are way out of the norm of Federal Reserve policy,” Hassett said, pushing back on calls from Sen. Thom Tillis, R-N.C., to drop the investigation.
Tillis has vowed to “oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved.”
Although the investigation formally has nothing to do with Powell’s responsibilities as Fed chair, a bipartisan group of lawmakers has interpreted the probe as a way for Trump to put pressure on Powell to cut interest rates — a move Powell has resisted. He believes making that call at the president’s request would jeopardize the Fed’s independent decision-making.
The criminal inquiry targeting Powell marks an extraordinary escalation in Trump’s feud with the central bank.
Supporters of Kevin Warsh, the president’s pick to replace Powell, praise his qualifications, while critics question whether he would maintain the Fed’s independence or align its operations with the president’s political goals.
Fox News Digital’s Amanda Macias and Leo Briceno contributed to this report.
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