White House National Economic Council Director Kevin Hassett on Monday pushed back against fears that Federal Reserve Chair Kevin Warsh would seek direction from President Trump on setting interest rates.
“We’ve known each other for 30 years,” Mr. Hassett said in a CNBC interview. “We definitely talk. But he’s not asking the White House for advice on what to do with interest rates.”
Mr. Hassett’s comments come roughly a week after the Fed, with Mr. Warsh at the helm, voted unanimously to hold interest rates steady at a range of 3.5% to 3.75%. It was the first Fed meeting since Mr. Warsh was appointed chair.
In announcing that rates would stay the same, the Fed noted that inflation is still above its target rate of 2%. Prices in May rose 4.2% compared to May 2025 amid soaring energy prices because of the war in Iran. In February, annual inflation stood at 2.4%.
Ahead of last month’s confirmation vote, Democrats bashed Mr. Warsh as a “sock puppet” who will slash interest rates and make decisions to please Mr. Trump.
“Republicans will come to regret their decision to aid and abet President Trump’s Fed takeover by installing Mr. Warsh as chair. I urge a ’no’ vote,” said Sen. Elizabeth Warren of Massachusetts, the ranking Democrat on the Banking Committee.
Mr. Warsh replaced Chairman Jerome Powell, who was repeatedly criticized by Mr. Trump publicly for failing to cut rates faster or deeply enough.
Mr. Hassett said that Mr. Warsh has already made “a huge amount of progress” on ways to “improve” the central bank, adding that it’s being reorganized.
“There are new procedures, new ways of thinking about things, inspection of old models and so on, so that we never get back to a situation where the Fed’s not moving and we got 9 percent inflation,” he said, referencing 2022 when inflation hit 9%, its highest total in roughly 40 years.
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