As the US Department of Justice pursues a criminal investigation into Federal Reserve Chair Jerome Powell’s testimony regarding the central bank’s headquarters renovation, Kevin Hassett, a top economic adviser to President Donald Trump, has come out in defence of Powell’s credibility.
Hassett, who is considered a potential successor to Powell when his term expires in May, told Fox Business Network that he expects “there’s nothing to see here” regarding the DOJ probe. The investigation was prompted by allegations from Trump allies that Powell had misled Congress about the scope and cost of the ongoing renovations to the Fed’s historic Washington headquarters.
“Jay’s a good man – I expect that there’s nothing to see here, that the cost overruns were related to things like asbestos, as he says,” Hassett said. However, the economic adviser acknowledged that he “sure wish[es] that they had been more transparent” in Powell’s congressional testimony on the matter.
Hassett, who chairs Trump’s National Economic Council, suggested that if he were to take over as Fed chair, he would “insist on transparency” and would have “answered the questions right away.” Nevertheless, he expressed confidence that Powell had been truthful in his statements to lawmakers.
The DOJ’s investigation marks a significant escalation in the Trump administration’s extraordinary attacks on the independence of the US central bank. The president has repeatedly criticised the Fed and demanded drastic interest rate cuts, which the bank has resisted.
Every living former Fed chair has condemned the DOJ probe, warning that similar prosecutorial actions in other countries have led to “highly negative consequences” for the cost of living. Central banks around the world have also issued a rare joint statement offering “full solidarity” to Powell.
Hassett, who is considered a top contender to replace Powell, said that if offered the Fed chair job, he would take it with a commitment to “independence and transparency” – areas he believes the central bank could have handled better in the past.
Meanwhile, at a White House event, Trump praised Hassett’s television performance and expressed reluctance to let him leave his role at the National Economic Council, suggesting the president may be hesitant to nominate him as the next Fed chair.
