Finance

Donald Trump selects Kevin Hassett to lead National Economic Council

Published

2 hours ago

November 26, 2024

White House Council of Economic Advisers Chairman Kevin Hassett addresses reporters during the daily briefing at the White House in Washington, U.S. February 22, 2018.

Jonathan Ernst | Reuters

President-elect Donald Trump picked Kevin Hassett to lead the National Economic Council, a role that puts him at the center of the administration’s policy-making discussions from trade to taxes and deregulation.

The move brings Trump closer to rounding out his economic team, with U.S. trade representative being the last of the key positions left.

Trump made the announcement in a post on Truth Social.

During Trump’s first administration, Hassett served as the chairman of the Council of Economic Advisers for two years, supporting the Republican’s corporate tax cuts and defending Trump’s punitive tariffs.

The 62-year-old Hassett also worked with Trump’s son-in-law Jared Kushner on immigration and backed a move to end waivers of sanctions for countries that buy Iranian oil.

The appointment came as Trump renewed his vow to raise tariffs by an additional 10% on all Chinese goods coming into the U.S. and impose tariffs of 25% on all products from Mexico and Canada. Such a move would end a regional free trade agreement.

Trump is set to be inaugurated as the next U.S. president on Jan. 20. He cited illegal immigration and illicit drug trade as reasons for the tariffs.

Hassett previously served as a scholar of fiscal policy at the conservative American Enterprise Institute think tank before Trump nominated him to the White House role in 2017.

Late last week, Trump signaled his intention to nominate Scott Bessent, founder of hedge fund Key Square Group and a seasoned market pro, as his Treasury secretary.

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Published

6 hours ago

November 26, 2024

Business Finance News

Finance

Fed officials see interest rate cuts ahead, but only ‘gradually,’ meeting minutes show

Published

9 hours ago

November 26, 2024

Business Finance News

Federal Reserve officials expressed confidence that inflation is easing and the labor market is strong, allowing for further interest rate cuts albeit at a gradual pace, according to minutes from the November meeting released Tuesday.

The meeting summary contained multiple statements indicating that officials are comfortable with the pace of inflation, even though by most measures it remains above the Fed’s 2% goal.

With that in mind, and with conviction that the jobs picture is still fairly solid, Federal Open Market Committee members indicated that further rate cuts likely will happen, though they did not specify when and to what degree.

“In discussing the outlook for monetary policy, participants anticipated that if the data came in about
as expected, with inflation continuing to move down sustainably to 2 percent and the economy
remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time,” the minutes said.

The FOMC voted unanimously at the meeting to take down its benchmark borrowing rate by a quarter percentage point to a target range of 4.5%-4.75%. Markets expect the Fed could cut again in December, though conviction has waned among concerns that President-elect Donald Trump‘s plans for tariffs could stoke inflation higher.

The meeting concluded two days after the contentious presidential election campaign resulted in the Republican emerging as the victor and set to begin serving his second term in January.
There was no mention of the election in the minutes, save for a staff notation that stock market volatility rose before the Nov. 5 results and fell after. There also was no discussion of the implications of fiscal policy, despite anticipation that Trump’s plans, which also include lower taxes and aggressive deregulation, could have substantial economic impacts.

However, members did note a general level of uncertainty about how conditions are evolving. In addition, they expressed uncertainty over where the rate cuts would need to stop before the Fed hit a “neutral” interest rate that neither boosts nor restrains growth.

“Many participants observed that uncertainties concerning the level of the neutral rate of interest complicated the assessment of the degree of restrictiveness of monetary policy and, in their view, made it appropriate to reduce policy restraint gradually,” the minutes said.

Conflicting signals on inflation and the uncertainty over Trump’s policies have caused traders to scale back their outlook for interest rate cuts ahead. The market-implied probability of a rate trim in December has drifted below 60%, with an expectation of just three-quarters of a percentage point in reductions through the end of the 2025.

Committee members appeared to spend much of the meeting talking about progress on inflation and a generally stable economic outlook.

Policymakers in recent days have expressed confidence that current inflation readings are being boosted by shelter cost increases that are expected to slow as the pace of rent rises eases and makes its way through the data.

“Almost all participants judged that, though month-to-month movements would remain volatile, incoming data generally remained consistent with inflation returning sustainably to 2 percent,” the document said.
“Participants cited various factors likely to put continuing downward pressure on inflation, including waning business pricing power, the Committee’s still-restrictive monetary policy stance, and well-anchored longer-term inflation expectations,” it added.

Policymakers had been expressing concern about the labor market. Nonfarm payrolls rose only 12,000 in October, though the meager gain has been attributed primarily to storms in the Southeast and labor strikes.

Officials indicated that the state of the labor market is generally solid.

“Participants generally noted … that there was no sign of rapid deterioration in labor market conditions, with layoffs remaining low,” the minutes said.